Understanding Dubai’s Mandatory Unemployment Insurance Scheme
- 02.05.2025
- Posted by: Uwe Hohmann
- Category: Dubai
In today’s fast-moving job market, financial security during uncertain times is more important than ever. That is why the UAE introduced its mandatory unemployment insurance scheme, which aims to protect both Emirati and expatriate workers in the private sector and the federal government. If you are currently employed in the UAE, here is what you need to know.
A Safety Net for Employees
The Involuntary Loss of Employment (ILOE) scheme was established under Federal Decree Law No. 13 of 2022. It provides eligible employees with temporary monthly compensation if they lose their jobs due to reasons beyond their control, such as redundancy or company downsizing.
The benefit? Workers can receive up to 60% of their average basic salary from the last six months before termination. However, this support is capped at three consecutive months per claim.
To qualify, employees must have contributed to the scheme for at least 12 continuous months. That means consistent participation is key if you want to benefit from this financial cushion when it’s most needed.
Deadlines Matter: Avoid Penalties
If you’ve recently started a new job in Dubai or anywhere in the UAE, you have four months from your employment start date to register for the scheme. Missing this deadline results in a fine of AED 400.
This penalty can be easily avoided by staying proactive. Registering early not only protects you from fines but also ensures you are building eligibility for future claims.
Why This Matters for Business Owners and Professionals
Whether you are an employer guiding your team or a professional safeguarding your income, understanding this scheme is crucial. Enrolling in the ILOE system is now a responsibility that cannot be overlooked as part of compliance in the UAE.
For businesses, this is also a reminder to inform new hires about their obligation to enrol. It’s a small step that can make a big difference in how your team experiences job security and support.
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