In 2023, Federal Decree-Law No. 13, the Involuntary Loss of Income Act, came into effect. Workers who have lost their job, can now be protected and count on insurance benefits.
Until the 30th of June, employees of both public and private companies in the UAE must take out unemployment insurance. All residents in the UAE are required to obtain unemployment insurance in order to protect themselves from potential financial hardship when looking for a new job.
Those who do not need to take out insurance:
- employees who have a short-term contract with a company of up to one year;
- business owners;
- household staff.
Before this law was signed into effect, employees in the free economic zone were not required to take out unemployment insurance. But due to changes in the law, these employees will also now be required ro do so and have until June 30th to get insured.
The responsibility of taking out insurance lies solely on the employee of the company - the employer is not required to do this on the employee’s behalf.
Note! If an employee fails to take out their own insurance by June 30th, they will be fined AED 400 (USD 109).
There are 2 options for mandatory insurance packages:
- For workers earning less than AED 16,000 (USD 4,360) per month, they will pay AED 5 (USD 1.5) and VAT each month.
- For workers earning more than AED 16,000 (USD 4,360) per month, they will be required to pay AED 10 (USD 3) and VAT each month.
Residents who have lost their job will be paid up to 60 % of their monthly salary averaged from the last six working months. This will be paid for a maximum of three consecutive months and only for those who have paid for unemployment insurance for at least 12 consecutive months.
You can sign up and pay for your federally required unemployment insurance on this website.