The unemployment insurance scheme is a highly beneficial policy that supports residents working in the UAE in case of an unemployment scenario. This insurance scheme ensures that Emiratis and residents receive financial support if they lose their job unexpectedly. If the employer terminates an employee, the UAE Unemployment Insurance scheme can help in many ways, allowing the employee to maintain a decent living and search for another job in the meantime.
The following is a detailed guide on Unemployment Insurance UAE. So, if you have been looking for accurate information on this, you don’t have to look anywhere else. All the information you need is in this article. Just read on.
What Exactly is the Unemployment Insurance Scheme?
As mentioned earlier, UAE Unemployment Insurance is an insurance scheme that provides financial support to individuals if they lose their employment due to valid reasons. In exchange for this insurance coverage, the employee must pay a premium, which will be deducted from the salary. These are the basic details of the UAE Unemployment Insurance scheme. The employee can also choose other additional benefits with this scheme, depending on the services provided by the insurance company.
The key objectives of this scheme are
• Providing financial aid to a worker losing a job due to valid reasons.
• Providing support till the worker finds new employment in UAE.
• Maintaining decent living conditions in the UAE for all residents working in the private and federal sectors.
• Improving the overall quality of HR and corporate working atmosphere.
How much is the premium for unemployment insurance?
The premium for insurance coverage varies according to the salary and the services subscribed by the worker. The basic premium is AED 5 per month or AED 60 annually for a worker with a salary of up to AED 16,000. For individuals with a salary of more than AED 16,000, the premium is AED10 monthly or AED 120 annually. The worker can also choose whether to pay the premium on a monthly, quarterly, or annual basis. So you can choose the type of scheme and additional benefits according to your salary and financial flexibility.
Who is eligible for this scheme?
This insurance scheme does not apply to individuals running their own businesses. Investors and individuals managing their own businesses are not employees, and therefore, they cannot get unemployment insurance for their job. This scheme is also not applicable to domestic workers, juveniles below the age of 18, and workers employed on a temporary contract. Other than these reasons, you may not be eligible for this scheme if you are a retiree receiving pension, even if you join a new employer.
All other individuals working in the federal or private sector must mandatorily have unemployment insurance coverage.
Terms & Conditions for Compensation Claims
For any claims to be considered valid, the insured individual must report the claim within 30 days of unemployment. The best option is to claim compensation as soon as the case of unemployment arises. Once you claim compensation, the insurance company has to abide by the rules laid by the Ministry of Human Resources & Emiratization and the Central Bank of UAE and transfer the compensation to the insured individual’s account within 2 weeks. For federal employees, the processing of the UAE Unemployment Insurance Scheme will be handled by the Federal Authority of Government Human Resources according to the guidelines of the Ministry of Finance. The insurance company has to pay compensation for up to 3 months of unemployment or until the insured individual finds a new job. Any breach of the terms and conditions of this insurance policy by the insurance company will be reported by the MoHRE.
Compensation Eligibility Terms
To be eligible for the insurance claim, you need to meet certain conditions applied by the insurance company. The conditions may differ according to the type of plan you subscribe to. However, the conditions of the basic policy are as mentioned below.
• The worker must not be terminated from work due to disciplinary reasons or any other legislation stated in the Human Resources Laws for Federal employees and the MoHRE Laws & Regulations related to employment and its amendments.
• Any other fraudulent activity related to a compensation claim or employment information can also lead to the ineligibility of the compensation claim.
• Along with the above conditions, the worker must have paid the insurance premium for a minimum of 12 months without fail. If the worker fails to pay the premium amount, the insurance claim is considered invalid.
Benefits of the Unemployment Insurance UAE
For individuals looking for professional stability and growth, having insurance jobs in UAE comes with several benefits. Some of the key advantages of the UAE Unemployment Insurance scheme are
• Better financial stability and a stress-free working atmosphere for the working individual.
• Decent living and sustenance till the worker find employment again.
• Improves retention and induces better focus among the employers and the employees regarding recruitment, termination, and or HR-related activities.
• The insurance company can also add other benefits to the basic scheme for an additional premium. So, the employees can choose from a wide range of options to suit their financial needs during employment.
Overall, Unemployment Insurance UAE is a crucial part of the professional and industrial sectors. It supports the country’s working-class community and helps employers with better quality of the working team.
Outsource Insurance Needs
One of the best options for employers is outsourcing HR solutions, Staffing, Insurance, and Compliance regulations. This helps the employer to focus on other aspects of business operations without worrying about compliance laws and federal regulations related to human resources. By partnering with a top HR outsourcing agency, the employer gets access to experts who understand local laws and other HR requirements well. This helps in better business functioning and quicker growth in the UAE corporate sector.
So, without delay, get in touch with our HR Operations experts at TASC Corporate Services and optimize your HR services.