GOVERNMENT UAE firms can pay for job loss insurance on behalf of employees

A top official explains whether domestic workers and freezone workers, two exempt categories, can enroll in the unemployment insurance program.

According to a high-ranking official, employees in the UAE can purchase insurance against job loss on their own behalf. Abdellatif Abuqurah, CEO of Dubai Insurance Company, stated that this is an optional feature in an exclusive interview with us.

If employers so desire, we are letting them purchase the policy on behalf of their employees. Additionally, I must emphasize “if they wish to.” Abuqurah stated, “The employer can choose to purchase the policy and deduct the value of the premium from the salaries of their employees, or they can choose to pay it on their behalf.”

The CEO added that Dubai Insurance has enrolled its employees in the plan and will pay for their premiums on their behalf.

Dubai Insurance Company is the insurance pool’s representative for the Involuntary Loss of Employment (ILOE) scheme, which is offered by nine different businesses. At the start of the year, the law went into effect. Employees could face a Dh400 fine if they do not sign up for one of the two plans by June 30, 2023.

Can categories that are exempt join?
At the moment, domestic workers and employees who work in free zones are exempt from the scheme.

Abuqurah provided the following explanation when asked if they could sign up for the program:

We are currently working on this. We are working with the freezones to find another arrangement that is exactly the same or can be customized to meet their needs and requirements.
However, they are exempt at this time.

The following other categories are exempt: Investors (owners of the companies they work for), temporary contract workers, minors under the age of 18, and pension-eligible retirees who started a new job.

Can higher premiums result in better benefits for employees?
The insured and the service provider may negotiate additional benefits under one of the provisions of the unemployment insurance law. Abuqurah responded that they wanted to keep the door open for the “product to develop and evolve over time” when asked about this.

We hope to be able to design additional coverage in the future. I am unable to provide a specific example at this time, but when it comes to additional benefits, we would like to keep them available as an option for employers, employees, and the insurance pool.
The official responded, “Yes, employees can sign up for the scheme with multiple insurance companies:

Nine UAE-based businesses make up the insurance pool. When you subscribe, the risk is basically split between the nine companies. Therefore, you are not only subscribing to one company but also to nine others.
Employees must have subscribed to the plan for twelve consecutive months in order to receive benefits, according to Dubai Insurance Company CEO’s confirmation.

Abuqurah stated, “Even if you changed jobs in between, you would need to have a subscription period of twelve months in order to be entitled to compensation.”

Why the plan was made? According to Abuqurah, the plan’s goal is to stabilize the UAE employment market.

It makes it possible for people to acquire a respectable sum of money to meet their fundamental needs. It provides some stability for both the employers and the employees.
He added that the plan was developed in collaboration with the ILOE insurance pool by the Ministry of Human Resources and Emiratization.

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