The new insurance scheme for employees in the private sector, including household service workers (HSWs), comes into effect beginning today, October 15, replacing the compulsory bank guarantee with a low-cost insurance system.
Nasser Al Hamli, Minister of Human Resources and Emiratisation, said that the move seeks to protect the rights of both workers and employers.
Under the new scheme, the currently mandatory Dh3,000 bank guarantee deposit per worker will be scrapped and will be replaced by an annual Dh60 insurance.
Moreover, the price of hiring household service workers (HSWs) in the UAE is also expected to become cheaper.
The insurance policy will cover end-of-service benefits, vacation and overtime allowance, return air ticket, unpaid wages, and cases of work injury.
It will also cover the cost of replacing the worker for health reasons or if the domestic worker wants to cancel the work relationship with employer. The total amount covered by the insurance is Dh20,000.
The insurance scheme was a decision approved by the UAE Cabinet, chaired by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, in June.
“Our goal is to remain a top destination for ease of doing business, through an agile economy based on flexibility and openness,” the UAE Vice President said in June.
