Euronews Appreciated Employment Services of Connect Resources

UAE’s government announced revolutionary changes to the Labor Law introducing an unemployment insurance scheme – financial assistance for the public and private sector.

Given it is a significant change it is natural for investors, entrepreneurs, and owners of big and small businesses to ask “How will it affect me and my business?”.

Aaron Portero – UAE expert and managing director of Connect Resources, a company offering tailor-made outsourcing solutions for businesses – comments on these changes in the EuroNews’ recent release

Source link: UAE unveils new unemployment insurance scheme

How will that system work?

According to UAE’s government communication, the system foresees that for a yearly fee/insurance premium an employee can count on basic insurance coverage and payment of up to 60% of the previous salary (but no more than AED 20 000) while searching for the new employment.

In practice employees will not have to worry about leaving UAE shortly after finishing one job and employers will have access to the local pool of available talents

Who will be covered by the system?

UAE authorities expect that this new program will act as a security blanket for every local employee, including freelancers.

Will free-zone and mainland companies be treated differently?

No. The UAE government is seeking to provide equal unemployment insurance to all employees in the region without distinction between Free-Zone businesses and Mainland companies. In both cases employees can count on the same coverage.

How much will it cost?

Currently it is assumed that the monthly yearly insurance premium will vary from AED 40 to AED 100. According to experts it is very likely that in the case of a larger number of employees, said rates will be discounted.

In that sense the companies using outsourcing solutions such as Employer of Record will most likely be in a better position to access such discounts.

Further to that, it is not yet clear if these fees will be deducted from the salary, have to be covered separately by the employer (any by that increase the total cost of employment) or shared between employer and employee.

However, we believe that upcoming months will bring more clarity and we will be able to help our partners in structing the employment cost in the most efficient way.

Will the insurance scheme require a new position in the company?

It is not clear if the final version of regulations will require companies to create new positions in the organization (for instance – insurance officer). However, given the importance of the unemployment insurance scheme for the authorities, it is probable that such a requirement will appear.

Nevertheless, if companies are required to do so, such insurance related functions can be outsourced to companies like ours.

What to do next?

New regulations will come into force in January 2023. Business owners and managers still have time to prepare their companies to be compliant (including accounting and HR systems). It is however fair to say that managing changes in the organization will be much easier with the support of an outsourcer.

An outsourcing company will make sure that everything is in place on the required date and by that alleviate businesses from any penalties or extra fees. Also, an outsourcer will make sure that the client is up to date with information on these new regulations.

“Everyone will be working very fast to make sure that their companies are complying with this particular regulation.” – says Aaron Portero, Managing Director of Connect Resources, a company providing tailored outsourcing solutions for businesses.

If you need help with handling this new unemployment insurance scheme and general insurance, give us a call at +971 41 316 688.

Before the call, please allow us to prepare ourselves for it and send sus a short note to with the following information

  • Name of the company.
  • Free-zone/Mainland.
  • Number of employees
  • HR function outsourced/in-house.
  • Used accounting system.
  • Used HR management system.

Knowing a bit more about your organization we will be able to provide you with the best service according to your requirements and current business needs. In addition, should you have any further doubts or queries about this new regulation, we will make sure to answer all of them. Connect Resources will provide you with real-time information about this and other changes in the law

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