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January 18, 2023

UAE implements mandatory unemployment insurance scheme

  • The mandatory unemployment insurance scheme will be implemented in the UAE starting 1 January 2023.

  • The current legislation requires all Emiratis and residents working in the private sector or federal government sector to register by 30 June 2023 with certain exceptions.

  • The contributions are required to be paid by employees and non-compliance will result in financial penalties and may impact an employee’s new work permit eligibility.

Executive summary

Effective 1 January 2023, the United Arab Emirates (UAE) has implemented the mandatory unemployment insurance scheme. This is pursuant to Federal Decree Law No. 13 of 2022 concerning Unemployment Insurance Scheme (Unemployment Insurance Law) issued on 15 September 2022, which can be found on the Ministry of Human Resources and Emiratisation (MoHRE) website.

Eligible employees must subscribe to the scheme by the deadline set and will be offered protection up to a maximum of three months’ cash compensation, provided the relevant criteria are met.

Detailed discussion


In May 2022, the MoHRE announced the launch of the mandatory unemployment insurance scheme to take effect in 2023. Emiratis and residents working in the private sector or federal government sector must subscribe to the scheme.

The scheme aims to attract and retain talent while enhancing competitiveness in the labor market and providing social protection.

Further guidance on the implementation of the scheme was issued and is detailed in Cabinet Decision No. 97 of 2022 and Ministerial Resolution No. 604 of 2022 issued on 14 October 2022 and 30 November 2022, respectively. The guidance can be found on the MoHRE website.

Eligibility and deadline for registration

Emirati and resident employees are required to participate in the mandatory unemployment insurance scheme. The Unemployment Insurance Law stipulates the following exempt categories:

  • Investors (self-employed)

  • Contractual workers/employees on a temporary basis

  • Pension-receiving retirees who have joined a new employer

  • Domestic workers

  • Juveniles under the age of 18

Moreover, it is observed that the UAE’s Involuntary Loss of Employment (ILOE) website restricts workers/employees in the free zones from subscribing to the scheme.

The deadline for employees to register for unemployment insurance is 30 June 2023. Eligible individuals employed from 1 January 2023 must register within four months from date of entry on employment entry permit or visa change.


Employees can currently subscribe to the scheme with nine approved national insurance companies via the following options:

  • Bank ATMs and kiosks

  • Business service centers

  • Money exchange centers

  • Telecommunication bills (e.g., Du and Etisalat)

  • SMS (to be launched)

Cost of subscription

The cost of subscription is based on the eligible employee basic salary levels. Insurance premiums for the basic insurance package are detailed below (employees can subscribe to additional benefits if they wish):


Category A

Category B

Basic salary

AED16,000 or below

Above AED16,000

Premium due (monthly)

Up to AED5 plus Value Added Tax (VAT)

AED10 plus VAT

Based on the legislation, the subscription, compensation values and categories may be subject to amendments.


Employees who fail to subscribe to the scheme by the deadline or fail to pay the premiums may be disqualified from receiving unemployment insurance benefits. In addition, non-compliance can result in fines of:

  • AED400 for failure to subscribe to the scheme

  • AED200 for failure to pay the premiums for more than three months

These penalties can be deducted by the authorities via various means, e.g., from salary account, end of service benefits, among others.

Claiming insurance benefits

To claim insurance benefits, the relevant conditions stipulated in the Unemployment Insurance Law must be met, including:

  • Insurance premiums should be paid for 12 consecutive months, according to the stipulated frequency

  • Evidence of unemployment, due to reasons other than resignation, must be provided

  • Employees dismissed for disciplinary reasons will not qualify

  • Employee must submit a claim within 30 days of termination from employment

  • The employee should have legal residence in the country and not be the subject of an existing absconding report

  • The claim should not be fraudulent or deceitful


The insurance providers will be required to make the insurance payout within two weeks of receiving the claim.

Payment due

Category A

Category B

Payout (for a maximum duration of three months)

60% on subscription salary, capped at AED10,000 per month

60% of subscription salary, capped at AED20,000 per month

Insurance premiums can be paid either monthly, quarterly, half-yearly or on an annual basis.


Employers may wish to inform their employees about the enforcement of the unemployment insurance scheme and should consider the impact of non-compliance on the ability to obtain new work permits. In addition, employers may wish to assess equalizing such payments for international assignees who are currently on secondment to the UAE.


For additional information with respect to this Alert, please contact the following:

EY Consulting LLC, People Advisory Services, Dubai

EY LLP (United States), Middle East Tax Desk, New York


The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.


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