UAE announced unemployment insurance for freezone employees, on Wednesday.
The job loss scheme was implemented on January 1, 2023 for private and government employees and excluded freezone workers. However, in a new update, the insurance scheme will be mandatory for all private and government sector employees including those in freezones.
The announcement was displayed via a pop-up on the official Involuntary Loss of Employment (ILOE) portal.
“Do you work in semi-government entities or companies registered in a UAE Freezone? You can subscribe now by clicking on subscribe here and proceed to Non-Registered in MoHRE,” the announcement read.
The scheme is aimed at supporting employees’ professional paths and lifestyles in the UAE labour market without imposing any additional cost to the employers.
The insurance is mandatory and is subscribable at AED5 to AED10 per month. The fine for non-subscription to the UAE Unemployment Insurance scheme is AED400.
UAE unemployment insurance category A
Category A insurance is available for a monthly fee of AED5, payable on a monthly, quarterly, or annual basis.
It is open to all employees earning a monthly salary of AED16,000 or less.
If a worker in the UAE loses their job, they are entitled to receive 60% of their average basic salary based on the preceding six months of employment, with a maximum payout of AED10,000 per month for three consecutive months.
The annual fee for Category A insurance is AED60, and the maximum unemployment insurance payout is AED30,000.
UAE unemployment insurance category B
For a fee of AED10 per month, Category B insurance is available to employees with a monthly salary exceeding AED16,000.
If an employee loses their job, they are entitled to receive 60% of their average basic salary based on the preceding six months of employment, with a maximum payout of AED20,000 per month for three consecutive months.
Premium payments for this category can be made monthly, quarterly, biannually, or annually.
The job loss scheme was made mandatory for all employees and those who fail to subscribe to the scheme will be subject to fines at the end of the grace period on June 30.
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