Involuntary loss of employment (ILOE) scheme effective in UAE from January 1, 2023
The employees who fail to comply with the scheme will be fined AED 400/- and AED 200/- for those who fail to pay the premium for more than 3 months and the amount will be deducted from the wages, or any alternative method as deemed acceptable by the Human Resources and Emiratisation Ministry. The employees will receive financial support for a maximum of 3 months for upon losing a job other than disciplinary actions or resignation. The compensation is calculated at up to 60% of the employee’s salary. Category A: Workers with a basic salary of AED 16,000/- or less will need to pay a monthly insurance premium of AED 5/-, i.e. AED 60/- annually. Category B: Those with a basic salary exceeding AED 16,000/- will need to pay AED 10/- per month, i.e. AED 120/- annually. Employees can make the premium payment on a monthly, quarterly, half-yearly, or annual basis. The benefits of the scheme cease once the employee gets a new job or leaves the UAE. Investors, domestic helpers, temporary contract workers, minors, and retirees are exempted from this scheme.
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