People are urged to apply as early as possible to avoid last-minute delays due to some technical issues which could result in penalties.
Employees in the UAE should subscribe to the job loss insurance scheme as early as possible because last-minute delays due to some technical issues could result in penalties.
The UAE implemented the mandatory Involuntary Loss of Employment Scheme (ILOE) on January 1, 2023, to provide security for employees who lost their jobs due to reasons other than disciplinary action or resignation they find a new job.
It’s mandatory for employees working in the private sector, the federal government, and free zones to subscribe before June 30 to avoid a Dh400 penalty. An additional Dh200 penalty will be imposed for failing to pay premiums.
However, it’s not mandatory for companies to purchase job loss insurance for their employees, but the firms have been asked to encourage their employees to subscribe to it.
- The human resources departments of local firms say that employees are facing a couple of issues when subscribing to the insurance scheme which results in a short delay in completing the transactions.
An HR executive said employees contact them when they cannot subscribe because passport or work permit details are not updated in the government system.
“When you’re applying for job loss insurance, and your passport details are incorrect in the current contract, it will not go through. So we raise the request with the immigration to update the information. And then they can buy the insurance,”
said one executive.
Importantly, the subscription journey for employees working in free zones is different from private and federal government workers.
- HR departments receive some daily requests for minor technical issues when subscribing to the scheme.
“Hence, it is advised that employees should subscribe to the ILOE scheme as soon as possible. What if they subscribe a day or two ahead of the deadline and a technical problem arises? This would delay the procedure, and the employee would have to pay a penalty. Therefore, we are requesting employees to subscribe as early as possible. We are sending out emails regularly to remind and ask them to do the needful,”
said the executive.
Under the ILoE scheme, employees with a basic salary of less than Dh16,000 are required to pay Dh5 per month or Dh60 per annum plus VAT as a premium. They will be compensated with 60 percent of the average basic salary (for the last six months prior to job loss) with a maximum of Dh10,000 per month for up to three consecutive months. While employees with a basic salary of over Dh16,000 are required to pay Dh10 a month or Dh120 annual premium +VAT under this scheme.
Since January 2023, more than two million people have subscribed to the scheme.
News Source: Khaleej Times