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Article | Global News Briefs

United Arab Emirates: Unemployment program introduced for 2023

By Steve Clements | October 24, 2022

A new program is set to give most workers in the United Arab Emirates, including foreign nationals, access to unemployment insurance benefits.
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Employer Action Code: Act

The United Arab Emirates government has approved a new unemployment insurance program for almost all employees (including foreign nationals) as part of a continuing initiative to modernize and strengthen the country’s labor market. The legislation, Federal Decree Law No. 13 of 2022, took effect October 11, 2022, but the program is not expected to begin operations until 2023. Implementation regulations with further details are expected to be issued by the end of 2022. Separately, the requirement introduced by the new labor law (Federal Decree Law No. 33 of 2021) that all employment contracts must be fixed-term agreements of no more than three years’ duration has been amended, effective September 29, 2022, to remove the three-year cap on the duration.

Key details

The main provisions of the new unemployment program include:

  • Participation is open to most employees in the public and private sectors, including foreign nationals. The program does not cover minors (under age 18), temporary and part-time employees, and employees receiving retirement benefits.
  • Unemployment insurance will be provided by government-approved private insurers. Annual premiums, payable by the employee, are expected to be between 40 United Arab Emirates dirhams and 100 dirhams, according to the Ministry of Human Resources & Emiratization.
  • To be eligible for benefits when unemployed, claimants must have been insured for at least 12 consecutive months. Individuals who are dismissed for disciplinary reasons are ineligible for benefits.
  • Eligible claimants will receive pay replacement benefits equal to 60% of their monthly covered pay for up to three months, with the monthly benefit capped at 20,000 dirhams. Payment will cease if the insured starts a new job during the benefit period. 
  • In the event of claims found to be the result of fraud or deception, the insured claimant will be subject to penalties and fines.
Federal Decree Law No. 33 of 2021 amended

Federal Decree Law No. 14 of 2022, effective September 29, 2022, removed the requirement that employment agreements not exceed three years in duration. Employers and employees can conclude agreements for any specified period (renewable without limit, as under prior law).

Employer implications

Law No. 13 does not have any provisions requiring action on the part of employers nor does it address how employees will pay the unemployment insurance premiums, select insurers or be enrolled in the program. Implementing guidelines will presumably address these matters. The requirement under Law No. 33 that all indefinite-term agreements be converted to fixed-term contracts by February 2, 2023 (one year after the effective date of the new labor law) remains in effect and should be met by the deadline.

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