Mandatory Emiratisation in UAE: Dh72,000 fine to be paid in single instalment; exemptions explained

Firms that fail to meet the 2 per cent target next year will still need to get 4 per cent Emiratis on their workforce by 2024, says ministry



by

Sahim Salim

Published: Fri 18 Nov 2022, 12:09 PM

Last updated: Tue 29 Nov 2022, 8:18 PM

If a UAE citizen hired by a private company resigns, the firm will have to get an Emirati replacement “instantly” to meet the Emiratisation target as stipulated by the law. No exceptions will be made, the Ministry of Human Resources and Emiratisation (MoHRE) told Khaleej Times in an interview.

Clarifying the deadline and the mandatory target, the ministry said December 31, 2022, is the last day for firms to hire Emiratis in at least 2 per cent of skilled roles.

Companies are required to up their Emiratisation rates by 2 per cent annually to reach 10 per cent by 2026. Firms that fail to meet the 2 per cent target next year will still need to get 4 per cent Emiratis on their workforce by 2024, the ministry said.

Fines to be paid in a single instalment

Starting January 1, 2023, the fine for not meeting the target is Dh6,000 per month for every Emirati not hired.

According to the ministry, non-compliant establishments shall pay a fine of Dh72,000 (Dh6,000 x 12 months) in one instalment.

“The establishment shall be considered non-compliant if the required number of employed Emiratis is not maintained until the following year. The establishment, in that case, shall be under obligation to pay the required contribution (annual fine),” the ministry explained.

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Additionally, the fines for not meeting the target increases by Dh1,000 per month progressively each year the target is not met.

Exemptions

The Emiratisation laws are not applicable to companies with less than 50 employees.

“The laws are only applicable to those companies registered with the MoHRE,” the ministry clarified. “(Also), these laws do not apply to businesses based in free zones.”

How companies will be monitored for compliance

According to the MoHRE, Emiratisation percentage shall be calculated based on the number of work permits registered in the ministry’s systems for UAE nationals. The requirements are:

a. The UAE national must possess a valid work permit.

b. Salaries shall be paid through the Wages Protection System, or any other system approved by the relevant authorities in the country to ensure compliance.

c. The Emirati must be registered with one of the approved pension funds in the country.

d. The relationship between the Emirati and the establishment shall be a contractual one. This means all the terms and conditions of the Labour Relations Regulation Law, its executive regulations and all decisions and orders must be met.

Discounts, incentives for firms that go above and beyond

Back in July, a group of 16 companies managed to achieve three times their Emiratisation target. These companies hired 1,166 UAE citizens in under one-and-a-half months after the requirement came into effect.

They received major incentives, including discounts of up to 80 percent on MoHRE fees.

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