The Unemployment Insurance System (ILOE) is an insurance system through which the worker pays a small insurance fee based on their salary and continues to pay it regularly. In case they are dismissed from their job without having resigned, or if they are dismissed for disciplinary reasons, they will be compensated with an amount that varies according to their salary.
Unemployment insurance is considered an essential financial shield for every employee planning for their future in the United Arab Emirates. With the rising cost of living, rapid changes, and fluctuations in the job market, this insurance provides a reasonable amount of money that meets the person’s needs until they find a new job and protects their family from being without income during the job search period.
The insurance amount is determined based on the salary, with details that we will explain in the following lines.
When Was the Unemployment Insurance Law Issued?
His Highness Sheikh Mohammed bin Zayed Al Nahyan, President of the State, issued Federal Decree-Law No. 13 of 2022 on unemployment insurance at the end of 2022. This law stipulates the provision of income for a maximum period of three months, at a rate equivalent to sixty percent of the employee’s last salary, in the event of termination from work. The compensation does not cover cases of resignation or disciplinary dismissal.
What Are the Goals That the UAE Aims to Achieve Through the Unemployment Insurance System?
The employee should not be left without an income to support them until they find another job.
Ensuring competitiveness in the job market in the UAE, guaranteeing a free and dignified life for the employee who has been laid off, as well as for their family, during the period of searching for a new job after being laid off.
This law is considered a strong incentive for the workforce and exceptional talents to come to the UAE and engage in the labor market with its challenges and competitiveness.
What Does the Unemployment Insurance Law Stipulate?
The worker enrolled in the unemployment insurance system is entitled to receive a percentage of sixty percent calculated based on their basic salary in the last six months of work preceding their unemployment.
Category One
The unemployed person is entitled to a compensation of ten thousand dirhams as a single claim, with a maximum of three months.
Category Two
The unemployed are entitled to compensation of twenty thousand dirhams as a single claim, with a maximum of three months.
Unemployment insurance covers all employees in the private and public sectors in the United Arab Emirates.
Are There Categories Exempt From Registering for Unemployment Insurance in the UAE (ILOE)?
The following categories are exempt from the possibility of registering for unemployment insurance:
The investor, that is, the owner of the establishment who works in their own establishment.
Domestic workers.
Anyone under the age of eighteen (minors).
Retirees who receive a pension and have taken up a new job.
Temporary contract workers.
What Is the Subscription Fee for the Unemployment Insurance System?
The value of the subscription to the unemployment insurance system is calculated based on the employee’s basic salary as follows:
The worker pays five dirhams monthly, which amounts to sixty dirhams annually, as an insurance premium if they earn sixteen thousand dirhams or less as a basic salary. The worker pays five dirhams monthly, which amounts to sixty dirhams annually, as an insurance premium if they earn sixteen thousand dirhams as a basic salary or less than sixteen thousand dirhams.
The worker pays ten dirhams monthly as an insurance premium, which amounts to one hundred and twenty dirhams annually if their basic salary exceeds sixteen thousand dirhams. The worker pays ten dirhams monthly as an insurance premium, which amounts to one hundred and twenty dirhams annually if their basic salary exceeds sixteen thousand dirhams.
The employee can pay the installments monthly, annually, semi-annually, or quarterly.
The insured may subscribe to additional benefits beyond the basic package by agreement with the insurance service provider. The value of the policy is subject to value-added tax.
Frequently Asked Questions About the Unemployment Insurance System (ILOE) in the UAE
How Is Unemployment Benefit Disbursed?
Unemployment benefits are granted for a maximum period of nine months, and if the unemployed person wishes to reapply more than once within a twelve-month period, they will receive the benefits again for a maximum period of nine months.
Are There Categories Exempt From the Unemployment Insurance System?
Yes, domestic helpers are exempt from unemployment insurance. Free zone employees are also exempt from unemployment insurance. All business owners who work in their own establishments are exempt from the insurance system. Temporary workers are also exempt from the unemployment system. In the category of young people under the age of eighteen, retirees are entitled to a pension after taking up a new job.
Are There Conditions to Receive the Unemployment Compensation Amount?
Yes, there are conditions for the insured worker to be entitled to compensation through unemployment insurance, which are: Paying the insurance premium monthly, annually, or semi-annually. The insured employee against unemployment must have completed a full year (12 months) continuously, and the period is calculated from the date of joining the unemployment insurance system.
Are There Cases That Prevent the Insured Employee Against Unemployment From Receiving Unemployment Compensation?
Yes, the insured loses the eligibility for compensation in the following cases:
The employee loses the right to unemployment compensation if they are dismissed from work for disciplinary reasons, as stipulated by the Labor Relations Regulation Law in the private sector, the Human Resources Law in the federal government, and any relevant existing legislation.
He loses his right to compensation for job loss in the UAE if it is proven that he is trying to obtain it through deception and fraud.
To work in a real facility and not a fictitious one.
If he joins a new job during his entitlement period for unemployment compensation.
If he starts a new job during his entitlement period for unemployment compensation.
Conclusion
Subscription to unemployment insurance is mandatory in the UAE, and its purpose is to ensure the stability of an individual’s and family’s life in case of job loss until a new job is found. For inquiries and more questions about unemployment insurance, do not hesitate to consult the FHS Solutions team for legal advice and consultancy.
You will find in our office located in Abu Dhabi, Electra Street, Al Reem Tower, the best legal advisors to assist you with your legal matters, represent you professionally before the federal courts, and provide you with valuable legal information that ensures your rights and avoids legal problems.
Explore our legal services for assistance with labor and employment matters.
Consult now with the best lawyer in Abu Dhabi, an expert in insurance cases and labor and employment matters. Contact FHS Solutions for legal advice and consultancy.
What Is Meant by the Unemployment Insurance System in the UAE? And What Are the Excluded Categories?
The Unemployment Insurance System (ILOE) is an insurance system through which the worker pays a small insurance fee based on their salary and continues to pay it regularly. In case they are dismissed from their job without having resigned, or if they are dismissed for disciplinary reasons, they will be compensated with an amount that varies according to their salary.
Unemployment insurance is considered an essential financial shield for every employee planning for their future in the United Arab Emirates. With the rising cost of living, rapid changes, and fluctuations in the job market, this insurance provides a reasonable amount of money that meets the person’s needs until they find a new job and protects their family from being without income during the job search period.
The insurance amount is determined based on the salary, with details that we will explain in the following lines.
When Was the Unemployment Insurance Law Issued?
His Highness Sheikh Mohammed bin Zayed Al Nahyan, President of the State, issued Federal Decree-Law No. 13 of 2022 on unemployment insurance at the end of 2022. This law stipulates the provision of income for a maximum period of three months, at a rate equivalent to sixty percent of the employee’s last salary, in the event of termination from work. The compensation does not cover cases of resignation or disciplinary dismissal.
What Are the Goals That the UAE Aims to Achieve Through the Unemployment Insurance System?
The employee should not be left without an income to support them until they find another job.
Ensuring competitiveness in the job market in the UAE, guaranteeing a free and dignified life for the employee who has been laid off, as well as for their family, during the period of searching for a new job after being laid off.
This law is considered a strong incentive for the workforce and exceptional talents to come to the UAE and engage in the labor market with its challenges and competitiveness.
What Does the Unemployment Insurance Law Stipulate?
The worker enrolled in the unemployment insurance system is entitled to receive a percentage of sixty percent calculated based on their basic salary in the last six months of work preceding their unemployment.
Category One
The unemployed person is entitled to a compensation of ten thousand dirhams as a single claim, with a maximum of three months.
Category Two
The unemployed are entitled to compensation of twenty thousand dirhams as a single claim, with a maximum of three months.
Unemployment insurance covers all employees in the private and public sectors in the United Arab Emirates.
Are There Categories Exempt From Registering for Unemployment Insurance in the UAE (ILOE)?
The following categories are exempt from the possibility of registering for unemployment insurance:
The investor, that is, the owner of the establishment who works in their own establishment.
Domestic workers.
Anyone under the age of eighteen (minors).
Retirees who receive a pension and have taken up a new job.
Temporary contract workers.
What Is the Subscription Fee for the Unemployment Insurance System?
The value of the subscription to the unemployment insurance system is calculated based on the employee’s basic salary as follows:
The worker pays five dirhams monthly, which amounts to sixty dirhams annually, as an insurance premium if they earn sixteen thousand dirhams or less as a basic salary. The worker pays five dirhams monthly, which amounts to sixty dirhams annually, as an insurance premium if they earn sixteen thousand dirhams as a basic salary or less than sixteen thousand dirhams.
The worker pays ten dirhams monthly as an insurance premium, which amounts to one hundred and twenty dirhams annually if their basic salary exceeds sixteen thousand dirhams. The worker pays ten dirhams monthly as an insurance premium, which amounts to one hundred and twenty dirhams annually if their basic salary exceeds sixteen thousand dirhams.
The employee can pay the installments monthly, annually, semi-annually, or quarterly.
The insured may subscribe to additional benefits beyond the basic package by agreement with the insurance service provider. The value of the policy is subject to value-added tax.
Frequently Asked Questions About the Unemployment Insurance System (ILOE) in the UAE
How Is Unemployment Benefit Disbursed?
Unemployment benefits are granted for a maximum period of nine months, and if the unemployed person wishes to reapply more than once within a twelve-month period, they will receive the benefits again for a maximum period of nine months.
Are There Categories Exempt From the Unemployment Insurance System?
Yes, domestic helpers are exempt from unemployment insurance. Free zone employees are also exempt from unemployment insurance. All business owners who work in their own establishments are exempt from the insurance system. Temporary workers are also exempt from the unemployment system. In the category of young people under the age of eighteen, retirees are entitled to a pension after taking up a new job.
Are There Conditions to Receive the Unemployment Compensation Amount?
Yes, there are conditions for the insured worker to be entitled to compensation through unemployment insurance, which are: Paying the insurance premium monthly, annually, or semi-annually. The insured employee against unemployment must have completed a full year (12 months) continuously, and the period is calculated from the date of joining the unemployment insurance system.
Are There Cases That Prevent the Insured Employee Against Unemployment From Receiving Unemployment Compensation?
Yes, the insured loses the eligibility for compensation in the following cases:
The employee loses the right to unemployment compensation if they are dismissed from work for disciplinary reasons, as stipulated by the Labor Relations Regulation Law in the private sector, the Human Resources Law in the federal government, and any relevant existing legislation.
He loses his right to compensation for job loss in the UAE if it is proven that he is trying to obtain it through deception and fraud.
To work in a real facility and not a fictitious one.
If he joins a new job during his entitlement period for unemployment compensation.
If he starts a new job during his entitlement period for unemployment compensation.
Conclusion
Subscription to unemployment insurance is mandatory in the UAE, and its purpose is to ensure the stability of an individual’s and family’s life in case of job loss until a new job is found. For inquiries and more questions about unemployment insurance, do not hesitate to consult the FHS Solutions team for legal advice and consultancy.
You will find in our office located in Abu Dhabi, Electra Street, Al Reem Tower, the best legal advisors to assist you with your legal matters, represent you professionally before the federal courts, and provide you with valuable legal information that ensures your rights and avoids legal problems.
Explore our legal services for assistance with labor and employment matters.
Consult now with the best lawyer in Abu Dhabi, an expert in insurance cases and labor and employment matters. Contact FHS Solutions for legal advice and consultancy.
Recent Posts