Explained: Up to 93% discounts on UAE work permits

Private sector companies that follow labour rules, exceed targets to benefit



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Sahim Salim

Published: Tue 24 May 2022, 7:02 PM

Last updated: Tue 24 May 2022, 10:33 PM

Private sector companies in the UAE will get discounts of up to 93 per cent on ministry fees if they exceed government-mandated Emiratisation rates and meet some other criteria.

This came as the Ministry of Human Resources and Emiratisation announced a new categorisation system for private sector firms on Tuesday.

The new system, which goes into effect from June 1, categorises companies into three. Firms that get the first rating stand to get massive discounts on fees, while those getting the third will need to pay all the fees in full.

Discounts apply to a number of services that include two-year work permit issuance and contract renewals.

Dr Abdulrahman Al Awar, Minister of Human Resources and Emiratisation, explained that the criteria include Emiratisation, cultural diversity of employees and commitment to labour rules.

Category 1

Private sector firms are required to increase their Emiratisation rates by 2 per cent annually, as mandated by a recent UAE Cabinet resolution. Companies that exceed this requirement will get a ‘first rating’ that help them get the maximum discounts.

“Such companies will pay only Dh250 instead of an original fee of up to Dh3,450,” explained Al Awar.

Firms will get this rating if they follow all labour rules and commit to the Wage Protection System, in addition to achieving one of some other criteria, including:

1. Increasing the annual Emiratisation rate by at least three times more than the set target of 2 per cent.

2. Teaming up with Emirati Talent Competitiveness Programme Nafis to hire and train at least 500 citizens every year.

3. Is classified as a small and medium-sized enterprise.

Category 2

Private establishments that follow all UAE labour laws and regulations, but do not fulfil the other standards will get this rating.

“They will also receive discounts, and pay Dh1,200 in fees. Their discount rate won’t be as high as the companies coming under the first category,” Al Awar added.

Category 3

Businesses that break rules or do not adhere to the labour law will get this rating.

“Such companies would need to pay all fees in full,” the minister said.

A culturally diverse workforce

Al Awar said recruiting employees from diverse backgrounds to ensure a balanced cultural environment at the workplace will help private businesses benefit from the reductions.

“Private companies hiring a maximum of 20 per cent employees from a specific nationality will meet the standard of cultural diversity,” said Al Awar.

“This will not only help companies get discounts on ministry service fees but provide them with more flexibility to attract talents.”

How the firms will be categorised

An electronic system developed over the past few months has been put in place. The ratings will be done based on inputs given by the ministry’s inspectors.

“The process of rating companies will be entirely done by the smart system after our inspectors give their inputs based on their visits to establishments,” said Al Awar.

Emiratisation targets

The UAE Cabinet had earlier approved increasing private firms’

Emiratisation rates to 2 per cent annually. The aim is to raise this rate to 10 per cent by 2026. This will create more than 12,000 job opportunities annually for citizens in all economic sectors.

Non-compliant companies will have to pay an amount of Dh6,000 per month from January 2023 for every citizen who has not been employed.

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