UAE job loss insurance: Residents make last-minute rush to beat Oct 1 deadline

Several people queued outside money exchange houses on Saturday, on the eve of the deadline to register for the UAE’s mandatory job loss insurance scheme.

For instance, this was the scene outside Al Ansari Exchange House in Sharjah's Rolla area. Al Ansari Exchange is among the several platforms where employees can subscribe to the insurance scheme.

Similar lines were also reported outside exchanges in other parts of the country. Such were long queues that some workers were unable to complete their registration process, Khaleej Times has learned.

Bilal Ahmed, a cleaner in Sharjah, breathed a sigh of relief after he successfully registered at Al Ansari Exchange in Al Nahda. “I was in a state of mind that the deadline was until end of October. I had to wait for nearly an hour in queue to get myself registered for the Involuntary Loss of Employment Insurance,” said Ahmed.

When Bilal was done with registering, he informed many of his friends and colleagues to subscribe to the insurance.

The scheme is a low-cost and easy way for employees to have financial support for a certain period in case of job loss. Those who failed to register for the involuntary loss of employment (ILOE) scheme from October 1 will face a fine of Dh400.

Employees' responsibility

Some residents said they were unaware of the deadline. However, authorities have issued several reminders that it is the employees' responsibility to get the insurance, and not the employers'.

Khalil, an expatriate worker from Pakistan, said he only learned about the deadline at 4pm on Saturday (September 30). He said: “Month end is always a busy day for me as we have to carry out maintenance work of a few flats. My colleague who was with me decided to do the registration online after work. However, we did not have the knowledge to do online transactions. After our work, we rushed to the exchange in two locations in Sharjah and found it to be very crowded. Finally we made our way to Sharjah City Centre and registered after waiting in queue for about 45 minutes.”

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Tawheed, a Bangladeshi worker, was among many who were unaware of the mandatory registration for job loss insurance. “I recently started working in Dubai. I did not know such an insurance existed. People have been talking about it for a few days now, but I felt it was not for us. I learned about it today itself and made my way to a nearby exchange. But I couldn’t subscribe to it as the exchange was shut at 10pm,” said Tawheed, who had to return after waiting in queue for nearly two hours.

Fines

A Dh400 fine is imposed on eligible employees who do not sign up for the scheme before the deadline. A Dh200 fine will be taken from employees who do not pay premiums for more than three months from the due date after subscribing. For employees who are caught taking insurance benefits of the scheme from others, a hefty fine of Dh20,000 will be imposed.

Salary deduction

It is important to remember that employees who don't sign up for the scheme will face fines and penalties, and not the employers. Unpaid penalties shall be deducted either from the employees' salary or end-of-service benefits, according to the Ministry of Human Resources.

No new work permit

Employees who fail to pay all their pending fines in regard to the insurance scheme, will not be allowed to apply for a new work permit until they have cleared them.

Exceptions

There are exceptions, however, to those applying to the scheme. These include investors, business owners, domestic workers, temporary employees, minors under the age of 18, and retirees who receive pension and have joined a new employer.

All federal and private employees excluding the above mentioned are obliged to register to the scheme and will face penalty upon violations.

Benefits

The unemployment insurance scheme is divided into two categories: Those with a salary of Dh16,000 and under have their insurance premium set at Dh5 per month, with the maximum monthly compensation being Dh10,000.

Employees whose monthly salary exceeds Dh16,000 have their insurance premium set at Dh10 per month and the monthly compensation is capped at Dh20,000.

Only employees who have subscribed to the scheme for at least 12 consecutive months can avail of the insurance benefits, which are calculated at the rate of 60 per cent of the average basic salary in the six months before unemployment and paid for a maximum of three months for each claim.

The employee must not have been terminated for disciplinary reasons or resigned.

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