In a significant move to enhance the authenticity and effectiveness of Emiratisation efforts, the UAE has recently introduced stricter regulations targeting companies that falsely claim to comply with Emiratisation policies. The new amendments to the UAE Labour Law include hefty fines—up to Dh1 million—for organizations found guilty of engaging in “fake Emiratisation.” This crackdown aims to address the misuse of Emiratisation quotas and ensure that employment opportunities are genuinely created for UAE nationals.
Understanding Emiratisation and Fake Emiratisation
Emiratisation refers to the UAE’s policy designed to increase the participation of Emiratis in the workforce. The government has set specific targets for Emirati employment across various sectors to reduce reliance on foreign labor and promote local talent.
Fake Emiratisation, on the other hand, involves companies falsely reporting that they meet Emiratisation quotas. This can include practices such as:
- Registering Emirati employees who are not genuinely engaged in work.
- Inflating Emirati employment numbers to satisfy regulatory requirements.
- Paying Emiratis nominal salaries while not actually involving them in productive work.
These deceptive practices undermine the Emiratisation goals and fail to provide real job opportunities for UAE nationals.
New Regulations and Penalties
The recent changes to the UAE Labour Law have introduced stringent penalties for companies that engage in or are found to be complicit in fake Emiratisation. The key highlights of the new regulations include:
- Fines Up to Dh1 Million: Companies that are caught falsifying Emiratisation figures will face substantial financial penalties. The maximum fine of Dh1 million underscores the severity with which the UAE government is addressing this issue.
- Enhanced Reporting Requirements: Organizations must now provide more detailed and transparent reports on their Emiratisation efforts. This includes accurate documentation of Emirati employees, their roles, and their contributions to the company.
- Stronger Enforcement Measures: The Labour Ministry has pledged increased oversight and enforcement actions to ensure compliance. This involves regular audits and investigations into companies’ Emiratisation practices.
- Legal Repercussions: Beyond financial penalties, companies found guilty of fake Emiratisation may face legal action, including potential revocation of business licenses or restrictions on future business activities.
The Impact on Businesses
These new regulations will undoubtedly have a significant impact on businesses operating in the UAE. Companies will need to reassess their Emiratisation strategies to ensure they are genuinely creating meaningful employment opportunities for UAE nationals. This might involve:
- Investing in Training and Development: To genuinely integrate Emiratis into the workforce, businesses might need to invest in training programs that equip them with the necessary skills.
- Adopting Transparent Practices: Companies will need to maintain transparent and accurate records of their Emiratisation efforts to avoid legal issues and fines.
- Reviewing Recruitment Practices: Ensuring that Emirati employees are not just on paper but are actively contributing to the company’s success will become crucial.
A recent amendment to the UAE labour law has introduced increased penalties for companies engaging in fake Emiratisation practices. Announced earlier this week, the updated law imposes fines ranging from Dh100,000 to Dh1 million for “fraudulent labour acts.”
Legal expert Abdulrahman Alqassem from Habib Al Mulla and Partners defined fraudulent Emiratisation as “falsely employing a UAE national by issuing a work permit and registering them with the establishment without actually assigning them meaningful tasks.” Essentially, this refers to hiring UAE nationals who are not given real work responsibilities.
Private sector companies in the UAE are legally required to boost the number of Emiratis in skilled positions. To meet these quotas, some firms have resorted to fake Emiratisation practices.
In a recent case, a private company faced a Dh10 million fine for failing to adhere to Emiratisation regulations. An Abu Dhabi court discovered that the company had created 113 fictitious roles for UAE nationals to avoid meeting its Emiratisation targets. Since the scheme’s inception in mid-2022 until November 2023, the Ministry of Human Resources and Emiratisation (Mohre) identified 1,267 UAE nationals employed in fake positions.
Alqassem noted that companies involved in false Emiratisation practices would face administrative fines ranging from Dh20,000 to Dh100,000 per instance, depending on the number of violations. Circumventing Emiratisation targets will attract fines between Dh100,000 and Dh500,000.
Other methods of evading the rules, such as reducing employee numbers or altering job categories, will incur penalties starting at Dh100,000 for the first offense and escalating to Dh500,000 for subsequent offenses. The new provisions also stipulate that fines will be multiplied based on the number of fictitiously employed individuals.
The updated decree also addresses additional labour law violations, including closing a business without settling workers’ rights and employing minors.
Legal expert Bassem Ehab elaborated on the implications of these changes. “Disputes arising from employment relationships must be addressed by submitting a request to Mohre,” Ehab told Khaleej Times. “The ministry’s decision is final, but either party can challenge it before the relevant Court of Appeal within 15 days.”
The amendments are designed to curb unfair and fraudulent employment practices and ensure strict adherence to Emiratisation policies.
The UAE’s new labour law amendments represent a decisive step towards ensuring that Emiratisation policies are implemented effectively and genuinely. By cracking down on fake Emiratisation, the government aims to create a more equitable job market for Emiratis and foster real opportunities for local talent.
For businesses, adapting to these new regulations will be essential not only for compliance but also for contributing to the broader goal of sustainable economic development in the UAE. It’s a chance for companies to demonstrate their commitment to supporting the Emirati workforce and, in turn, strengthen their position in a rapidly evolving market.
In conclusion, the UAE’s crackdown on fake Emiratisation is a clear signal that the government is serious about achieving its national employment goals. Companies need to align their practices with these new standards to avoid hefty fines and contribute positively to the country’s economic and social landscape.