Starting Monday, January 1, 2023, the subscriptions to the Involuntary Loss of Employment website has officially opened.
The new unemployment insurance scheme which was recently announced by the Ministry of Human Resources and Emiratisation (MoHRE), provides a job safety net that supports employees while providing them with career stability at no cost on employers.
It stemmed from the Federal Decree-Law No. 13 of 2022.
The mandatory scheme entitles all UAE nationals and residents working in both the private and federal sector to 3 months cash compensation if they lose their job as a result of termination, not unless they have been terminated due to disciplinary actions or resignations.
Terms of the new ILOE scheme
- There are two insurance categories
Those with a basic salary of AED 16,000 or less are covered by one of the two insurance plans. AED 5 per month, which is AED 60 annually, is charged for insurance for the employees covered by this plan.
The second category includes employees whose basic salary is more than AED16,000 a year, who are required to pay AED10 per month or AED120 annually in insurance.
Subscription is free of charge from Dubai Insurance but if you will be using other channels such as exchange houses, telecom firms and banks, there could be an additional fee for the services.
2. Who should pay for the fees?
The employee, who will benefit from the scheme, shall cover the expenses for the unemployment insurance.
3. How to be eligible
To be eligible for the unemployment compensation, which is 60 per cent of the basic salary earned during the last six months prior to termination, individuals must have to be subscribed for at least 12 consecutive months.
If the individual leaves the country or finds a new job then they lose the right to the claim.
4. Exempted categories
Investors or owners of establishments in which they work, domestic workers, temporary contract workers, juveniles under 18 years, and retirees who receive a pension and joined a new job are considered as exempted categories for the scheme.
5. What will be required to avail the compensation?
Apart from no interruption in subscription for 3 consecutive months and regular payment of all insurance premiums on time, the employee will need to provide proof that the reason of unemployment is not resignation.
It is also important to note that the claim must be submitted within 30 days from date of loss of the work. There should also be no existing complaint related to the absence from work.
Additionally, one should understand that the insured shall not be entitled for compensation if there has been fraud or deceit involved in his claim, or if the establishment they work for is fictitious.
The loss of employment should not be the result of non-peaceful labour strikes or stoppages, whether they result in harm or not and the insured must be legally present in the UAE.
6. Where can I apply?
Apart from the Involuntary Loss of Employment website, residents and UAE nationals can subscribe to the scheme through the smart application iloe, Kiosk machines, business services centers, Al Ansari Exchange, bank ATMs and application as well as telecommunication bills.
7. How long will the claim approval take?
Claims can be submitted through their various channels like the website, app or call centre and the payment will be processed two weeks from the date of the claim submission.
8. When is the deadline for subscription?
In a notice posted by ILOE, the deadline for subscribing to the mandatory scheme is until June 30, 2023.
“As per the Ministerial Resolution No. 604 of 2022 regarding the Involuntary Loss of Employment (ILOE) , the eligible employees have a grace period of 6 months (till 30June 2023) to subscribe in the ILOE. Also please note that if the insured/worker was employed at a date later than Jan 01st, 2023, he will have a grace period of 4 months to subscribe , starting from the day he landed in the UAE or Visa Change Status,” said the ILOE statement.
9. What happens if I fail to subscribe on time?
Those who will fail to subscribe will be subject to a Dh400 fine, which can be paid from the same channels through which the employees purchase the policy.
