ILOE unemployment insurance for UAE employers

Does an employer have to subscribe staff to ILOE?

No. Art 2 of Cabinet Resolution 97 of 2022 has workers of the federal government and private sectors subscribe by buying a policy under which the insured insures himself.¹

What is the employer’s role?

The employer’s role is narrow.

• Encouraging staff. Employers “encourage and direct” employees to subscribe and pay. The extent and consequence are not made clear. Ministerial Resolution 604 of 2022 Art 8(2), as summarised by K&L Gates.²
• Collusion. An establishment that colludes with an employee to obtain benefits is fined AED 20,000 per case. Cabinet Resolution 97 of 2022, Art 15(2).¹
• Collecting fines. Fines are collected from the insured’s account shown in the Wages Protection System, or from end of service gratuity or alternatives. Cabinet Resolution 97 of 2022, Art 8(1).¹
• Work permits. A worker with unpaid fines cannot receive a new work permit until they are paid. Ministerial Resolution 604 of 2022 Art 10, as summarised by K&L Gates.²
• Paying for staff. Employers may pay on staff’s behalf and arrange reimbursement. In May 2023 this was open to mainland employers only. EY, 31 May 2023.³

Labour Law Art 13(9) has the employer bear the expenses of insurances set by the legislation in force.⁴ Cabinet Resolution 97 places the premium on the insured.

Ask MOHRE whether an employer can make payment a contract term, whether an employer is liable for failing to encourage staff, and whether the May 2023 position on employers paying for staff still applies.

Which workers fall outside ILOE?

Decree-Law 13 of 2022 applies to workers of the private and federal government sectors. Art 3 excludes investors who own the establishment they work in, domestic workers, workers on temporary contracts, under-18s, and retirees on a pension who take a new job.⁵ Cabinet Resolution 97 Art 2 adds citizens who have met the conditions for retirement.¹

What does ILOE cost, and what does it pay?

The premium ceiling and the compensation cap both double above a subscription salary of AED 16,000.

Art 1, Art 7 and Art 10 set these terms. Art 10 also caps compensation at 12 months across a working life in the State.¹ The operator’s site quotes the premiums plus VAT, sells 1-year and 2-year policies, adds the full VAT to the first instalment, and says other channels may carry a service charge.⁶ The government portal lists nine channels for subscribing.⁷

A policy cancels if premiums go unpaid for more than 3 months, and the worker re-subscribes with a new policy. Workers paid on commission may choose a category if basic salary is not specified.⁸

When can a worker claim?

A claim under Art 9 requires 12 consecutive months of subscription, premiums paid, no resignation, no disciplinary dismissal, a claim within 30 days, no pending absence complaint, no fraud or fictitious establishment, no non-peaceful labour disturbance, and legal residence. Art 13 has the provider pay within two weeks of a compliant claim.¹

What is the fine for not subscribing or not paying?

The fine for not subscribing is AED 400.¹ For premiums unpaid for more than 3 months, Art 8(1) of Cabinet Resolution 97 says AED 200, and the government portal says AED 400.¹⁷ The portal for federal legislation lists no amending instrument for Resolution 97. The Minister may allow instalments or exempt a worker from the fines under Art 8(2).

Ask MOHRE which figure it applies for unpaid premiums.

Does ILOE apply to free zone workers?

The decree-law does not mention free zones, and sources differ.

The first two rows are from EY³ and the third from ADGM.⁹

For any other zone, ask the zone authority or MOHRE.

How does a worker subscribe?

Play: Watch the video to learn about the steps to register in the Unemployment Insurance Scheme.Nothing loads from YouTube until you click. Plays through youtube-nocookie.com.