The deadline for signing up for the UAE’s mandatory Involuntary Loss of Employment (ILOE) insurance scheme is fast approaching, with a cutoff date of October 1. All employees working in the private sector, federal government departments, and free zones are required to subscribe to this scheme, or they will face fines. Nearly 5 million individuals have already enrolled in this low-cost job security program, which provides financial support for a limited period.
Is it mandatory to subscribe to the ILOE?
Yes, it is mandatory, and employees who fail to subscribe to it will be subject to fines.
Can employees who are not registered with the Ministry of Human Resources and Emiratisation (MoHRE) register?
Companies not registered with the MoHRE can subscribe on behalf of their employees by providing their trade license along with a request letter to [email protected].
What are the related penalties?
- Employees who do not subscribe to the scheme before the October 1 deadline will face a Dh400 fine.
- If an employee subscribes but fails to pay premiums for over three months from the due date, their insurance certificate will be canceled, and a Dh200 penalty will be imposed.
How will the fines be collected?
Employees are responsible for paying the fines. If they do not pay within three months of the due date, the MoHRE may deduct the amount from their wages through the Wage Protection System, end-of-service gratuity, or other acceptable methods.
Will non-payment of fines affect job prospects in the country?
Yes, non-payment of fines will impact an individual’s eligibility for a new work permit until all outstanding fines are settled within the specified timeframe.
Who is exempted from the scheme?
Exemptions apply to investors (company owners), domestic helpers, temporary contract workers, juveniles under the age of 18, and retirees entitled to a pension who have taken up new employment.
How do employees subscribe to the scheme?
Employees can subscribe to the ILOE scheme through various channels, including the ILOE website and app, Al Ansari Exchange, business centers Tawjeeh and Tasheel, Etisalat (coming soon), kiosks (upay and MBMEPay), and Botim (coming soon).
How does the scheme work?
Employees pay a low premium to subscribe to ILOE. If they lose their jobs for reasons other than disciplinary action or resignation, they are eligible for financial support for up to three months.
If I subscribe to the scheme this month and lose my job weeks later, will I get compensation?
No, employees become eligible for compensation only if they have been subscribed to the scheme for at least 12 months. Subscriptions began in January 2023. For example, if someone subscribed in January, they become eligible for compensation only after December 2023.
What are the two ILOE plans and their benefits?
- Category A (Basic salary Dh16,000 or below): Costs Dh5 + VAT per month, with compensation benefit at 60% of basic salary, up to Dh10,000 per month.
- Category B (Basic salary above Dh16,000): Costs Dh10 + VAT per month, with compensation benefit at 60% of basic salary, up to Dh20,000 per month. Premiums can be paid monthly, quarterly, semi-annually, or annually.
For how long will the benefits be offered?
Benefits are provided for up to three months.
Under what circumstances will the benefits cease?
Benefits will cease if the beneficiary secures a new job or leaves the UAE.
What are the conditions to claim compensation?
To claim compensation, the individual must have a minimum subscription period of 12 months, have made timely payments, not have resigned from employment, not have been dismissed for disciplinary reasons, submit the claim within 30 days from the date of termination or labor complaint settlement referred to the judiciary, and not have an existing absconding complaint.