No Work Permits For Workers Who Fail To Pay Job Loss Insurance Fines

Workers with unpaid penalties for not subscribing to job loss insurance in the UAE will have their fine amount deducted from their wages. A ministerial resolution also states that such employees will not be eligible for new work permits until they have settled their obligations.

Subscription to the job loss insurance scheme is a requirement for all workers of federal government departments and private sector companies in the UAE. Workers can subscribe to the scheme starting Jan. 1 to June 30.

Under the scheme, workers with a basic salary of less than Dh 16,000 should pay Dh 5 each month or Dh 60 per annum plus VAT as a premium. In the case of involuntary job loss, they will be compensated with 60 percent of their average basic salary for three consecutive months.

Meanwhile, workers with a basic salary of over Dh 16,000 should pay Dh 10 each month or Dh 120 per year to subscribe to the scheme.

As subscribing to the scheme is mandatory, workers will face a financial penalty for failure to do so. Under "fines and collection methods" of a ministerial resolution about the scheme, "workers/employees who fail to pay their fines for three months from the due date will have the fine amount deducted from their wages through the Wage Protection System, end-of-service gratuity, or any other alternative method deemed acceptable by the Ministry of Human Resources and Emiratization."

The ministerial resolution also states that workers who fail to pay their fines within the specified timeframe will not be eligible for new work permits. The insurance certificate of the worker will also be canceled if he fails to pay the insurance premiums for more than three months from the due date. He/she will also be required to pay a penalty of Dh 200.

Employers found to have colluded with the insured to avail of job loss benefits will also be penalized by law. "If an employer colludes with the insured to obtain unemployment insurance benefits, the ministry will impose an administrative fine of Dh 20,000 for each case," the resolution states.

Workers can pay their fines via the MOHRE website, phone app, and business service centers. They have the option of paying through installments or requesting a waiver via the same channels.