The United Arab Emirates will introduce a form of unemployment insurance, the cabinet said on Monday, the latest reform by the Gulf country as it strives to attract talent and investment amid increasing regional economic competition.
This is a new social support program that will mean people who lose their jobs receive a basic cash payment each month.

The scheme, due to be implemented in January 2023, will be mandatory for Emiratis and residents in the private and public sectors.

UAE expats and citizens alike will be eligible to receive unemployment insurance, a new scheme that aims to protect employees against the risk of job loss.

Dr. Abdulrahman Al Awar, Minister of Human Resources and Emiratisation, confirmed that employees who lose their jobs under unforeseen circumstances will receive cash support for a period of time.

Under the decision, set out on Thursday by the labor minister, every resident would pay a maximum of Dh100 per year into an insurance company scheme.

Insured workers would receive some money for a limited period if made unemployed, UAE Prime Minister and Vice-President Sheikh Mohammed bin Rashid al-Maktoum, who is also the ruler of trade hub Dubai, said on Twitter, citing a cabinet decision.

"The intention is to strengthen labor market competitiveness, provide a social umbrella for workers and establish a stable working environment for all," the statement said.

“The amounts an employee will have to pay according to the insurance package they choose will be between Dh40 and Dh100," said Abdulrahman Al Awar, Minister of Human Resources and Emiratisation.

“In case they were sacked they will receive a monthly salary that makes about 60 percent of the basic salary with a maximum amount of Dh20,000.”

The plan is part of the country's efforts to attract and retain employees by reducing business risks so that the employees who lose their jobs will receive cash support for a period of time until the employee finds another job.

The report further notified that as of 2023, employees will have to contribute to an unemployment insurance plan through insurance companies. Unemployment insurance fees may range between 40 dirhams and 100 dirhams per year and the plan would include paying 60% of the worker’s basic salary for a certain period.

Notably, just as foreign residents make up more than 80% of the population of the UAE and have been a mainstay of the economy, the UAE Cabinet has approved a new entry and residence scheme for foreigners.

HRavailable keeps you updated on the latest news in the UAE job market.

Get to know more in-depth knowledge on various HR-related topics visit HRavailable.

HRavailable keeps you updated on the latest news in the job market.

Get notified about the latest job openings through HRavailable and never miss a chance to get noticed by the recruiters.