The UAE’s Ministry of Human Resources and Emiratisation (MoHRE) and the Securities and Commodities Authority (SCA) have recently launched an alternative scheme for end-of-service benefits, which offers a new way for employers to manage these financial commitments. Under this optional scheme, employers who choose to participate must register with the Ministry and pay a monthly subscription fee.
This innovative scheme, outlined in Cabinet Resolution No. (96) of 2023, requires employers to contribute to an investment fund monthly. This fund is designed to ensure employees receive their end-of-service entitlements. However, the resolution also stipulates strict penalties for employers who fail to adhere to this payment schedule.
If an employer does not make the basic subscription payment within two months, MoHRE will halt the issuance of new work permits and may implement additional administrative actions. Furthermore, a significant penalty of Dh1,000 per beneficiary per month will be imposed if payments are overdue by four months.
To enforce these regulations, fund managers are required to notify employers in writing within 30 days of the missed payment and report any non-payment to the Ministry within 15 days of sending this notification.