Free zone companies in the UAE are now permitted to register their employees for the Involuntary Loss of Employment (ILOE) scheme, widely recognized as the Unemployment Insurance Scheme. The update was released on the official ILOE website on September 11, 2023.
Earlier in May, the scheme was expanded to cover employees in free zone firms and semi-government organizations, facilitating individual registration. The recent announcement takes a step further, allowing companies to register employees who could not sign up independently. It is essential for employees to understand that they will bear the insurance policy costs.
The scheme intends to provide financial support to employees who find themselves without a job due to employer termination, excluding cases of disciplinary action or resignation. Through this scheme, workers can secure some financial stability while navigating unexpected job losses.
Companies looking to register their employees can do so under the ‘non-registered companies in the Ministry of Human Resources and Emiratisation (MOHRE)’ category by submitting necessary documents to companyreg@iloe.ae. The required documents include a copy of the company’s trade license and a formal request letter to enroll the workers.
Upon registration, employees will be classified into categories A or B based on their basic salary, determining the applicable insurance premium and potential monthly compensation in the event of job loss.
Category A encompasses employees earning a basic salary of Dh16,000 or less, with an insurance cost of Dh5 monthly or Dh60 annually, and offers a monthly compensation of 60% of the basic salary, up to Dh10,000.
Conversely, category B covers individuals with a basic salary exceeding Dh16,000, commanding a Dh10 monthly fee or Dh120 annually, while promising 60% of the basic salary up to Dh20,000 as monthly compensation.
Upon making the first premium payment, employees will receive an insurance certificate, confirming their enrollment and stipulating the obligation to maintain timely premium payments.
The MOHRE has extended the enrollment deadline to October 1, 2023, a move from the earlier deadline of July 1. However, those commencing employment post-May 30, 2023, must ensure registration within four months of their employment start date.