UAE job loss insurance: 3 fines for violations, failure to subscribe before 30th September

It is now mandatory for all employees in both UAE public and private sectors to have signed up for unemployment insurance.

The grace period for when you can register will end on 1st October, 2023, meaning that anyone signing up after this date will be subject to fines.

What is Unemployment Insurance?

The scheme is officially called Involuntary Loss of Employment Insurance, and it has been introduced to help protect residents in the case that they lose their jobs.

However, you can only claim the insurance if you become unemployed due to a reason that is not disciplinary action or resignation.

The scheme is now mandatory under Federal Decree-Law No.13 of 2022. Residents have been able to register since January 1^st, 2023. The initial deadline was the end of June, 2023, but was extended until October 1^st to ensure everyone had signed up in time.

What are the unemployment insurance fines?

If you miss the 1st October deadline, or fail to comply, there are three severe penalties that could be imposed on you.

Dh400 fine: If you have not registered by 1st October, you will be eligible for a fine of Dh400.

Dh200 fine: If you do not pay premiums for more than three months from the due date. In this case, your insurance could also be cancelled.

Dh20,000 fine: The most severe penalty, a Dh20,000 fine could be imposed on employers who are found to be conspiring with unemployed individuals to reap the insurance pay out.

What are the benefits?

Created to help protect UAE residents, if you become unemployed the scheme could allow you to get up to 60% of your basic salary back for three consecutive months. However, this will not apply if you became unemployed through disciplinary action or resignation.

If you need to make a claim, you will only be able to receive a pay out if you have paid the insurance premium for at least 12 months. The process to claim also requires you to have and submit proof of your job loss within one month of the event.

How do I register and how much does it cost?

If you still have not signed up for the unemployment insurance, you can do so through the ILOE website. This will guide you through a series of steps that will allow you to sign up, and pay your premium.

If you cannot pay online, you can also do this at an ATM machine, kiosks and banking apps.

The cost varies depending on your yearly salary:

Salary of less than D16,000 – Dh63 (including VAT) for one year

Salary of more than Dh16,000 – Dh126 for one year

Make sure you sign up before the deadline, you can visit the ILOE portal here.