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
Employees in the UAE are personally responsible for registering for the unemployment insurance scheme. They must complete the registration within four months of their employment start date. If they fail to do so, a fine of AED 400 is imposed directly on the employee. The employer does not handle this process, nor are companies required to facilitate or enforce compliance on behalf of their staff.
Why This Matters for Employees and Employers
Understanding the ILOE scheme is essential for anyone working in the UAE. While employers may choose to inform new staff about the requirement, the obligation to register rests solely with the employee. There is no legal requirement for companies to enrol employees or monitor their compliance.
For employees, taking responsibility for this registration is part of staying compliant with UAE regulations.
For business owners, being aware of the rules ensures clarity when onboarding new team members, but it is ultimately up to each employee to act.
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