Employees in the UAE’s government and private sector can opt in for an unemployment insurance scheme that came into force on Tuesday.
The move allows insured individuals to claim a specific cash amount for a limited period if they lose their employment, the country’s Ministry of Human Resources and Emiratization (MoHRE) announced on Thursday.
The compensation will be paid monthly, calculated at 60 percent of the employee’s subscription salary and subject to a maximum of $5,450 (AED 20,000) per month, for no more than three months from the date of unemployment.
The system is expected to provide stability and sustain an individual’s standard of living until another employment is found. The system functions like an insurance package where residents pay forward a certain sum every year to the unemployment fund.
“It also aims to enhance the competitiveness of the UAE nationals, boost the attractiveness of the UAE’s job market for the best international and national talents and contribute to building a competitive knowledge-based economy that is among the best globally,” MOHRE said, according to a report by the Emirates News Agency (WAM).
The changes come as part of the UAE’s wider vision to attract and retain talent in the country.
“Reports showed the preference of people worldwide to work and settle in the UAE because of the advantages it provides in terms of security, safety, job benefits, as well as the level of education, health, and quality of life,” Dr Abdulrahman al-Awar, Minister of Human Resources and Emiratization was quoted as saying by WAM.
“The UAE prioritizes preserving human dignity, and this decree enhances the legislative environment to safeguard the rights of all employees in the country – Emiratis and residents alike and provides them with the best means of care at all levels,” he added.
The new law excludes “investors (owners of the establishments in which they work), domestic helpers, part-time employees, juveniles under the age of 18, and retirees who receive a retirement pension and have joined a new job,” according to WAM.
Additionally, to claim the benefits, the employee must be continuously insured for no less than 12 months and must not have been let go from their previous workplace for disciplinary reasons.
The UAE cabinet approved the scheme in May to provide unemployment benefits as part of a larger job security initiative launched by the government.
Gulf states Qatar, Oman, Kuwait and Saudi Arabia have provided some form of unemployment support to citizens while Bahrain also has a form of jobless insurance for resident non-citizen workers.
Permission to reside in Gulf countries like the UAE has traditionally been tied to employment. Under recent reforms UAE residents whose visa is cancelled can remain for up to six months versus 30 days previously.