The new Unemployment Insurance Law of the UAE

The UAE government announced the Unemployment Insurance under Federal Decree-Law No. 13 of 2022 Concerning the Unemployment Insurance Scheme for unemployed people.

In this scheme, a person working in the private sector or federal government sector will get the right of insurance that provides financial support for a maximum of 3 months period of time in the event of unemployment in exchange for a portion of the employee's contributions in accordance with the Law.

The Categories of Employees who will not be Covered under this Law

a) Investors (Business owners who own the entire business and manage it themselves)

b) Domestic Workers

c) Contractual workers/employees on a temporary basis

d) Juveniles under the age of 18

e) Pension-receiving retirees who have joined a new employer

Conditions of Eligibility

1. There must be a minimum subscription period of (12) twelve consecutive months for the insured in the scheme.

2. The insured should not be dismissed for disciplinary reasons.

3. The insured shall not be entitled to compensation if there has been a fraud.

4. During the period of compensation entitlement, the payment of compensation shall cease if a worker is hired by another employer.

Compensation Amount and Duration

Monthly compensation of 60 percent of the contribution salary is provided for a period of three months from the date of unemployment up to a maximum of Dhs.20,000 (twenty thousand dirhams). A compensation period of 3 months is available for each claim; provided that the coverage period does not exceed (12) twelve months during the insured's employment in the UAE labor market.

Additional benefits may be negotiated between the insured and the service provider. Compensation payments made under this Decree-Law shall not prejudice any other statutory compensation or entitlements available to the insured.

The following objectives are intended to be achieved by this Law to provide the insured with income for a limited period of time during his unemployment until an alternative employment opportunity becomes available, enhancement of Emirati cadres' competitiveness in the labor market and the provision of social protection to ensure their continued decent living until an alternative employment opportunity becomes available, in addition to achieving a competitive knowledge economy by attracting and retaining the best international talent from skilled workers.

Written by:

Imran Khan | Bin Eid Advocates & Legal Consultants