Many companies have registered their employees for the job loss insurance scheme which came into effect on January 1, 2023.
The UAE government made it mandatory for the federal government and private sector employees to subscribe to the Involuntary Loss of Employment (ILOE) insurance scheme. Failing to subscribe by June 30 will result in a Dh400 penalty for the workers.
“A good number of companies have registered their employees for the ILOE scheme. In addition, companies are responsible for creating awareness among employees about the ILOE scheme,”
said Dana Kansou, manager, strategic partnerships at Dubai Insurance, which is spearheading the campaign on behalf of the ILOE pool in the country.
She advised companies to send reminders to employees time and again so that they subscribe in time and don’t incur fines.
Kansou suggested that since companies are offering other incentives such as life and medical insurance, they can also offer this as an incentive to their employees. However, she stressed that it is mandatory for employees to subscribe and not employers.
As reported earlier, employers in the UAE can buy the insurance against job loss on behalf of their staff. As part of this optional feature, the employer can buy the policy and deduct the value of the premium from their employees’ salaries, or can decide to pay it on their behalf.
Employees in the UAE can subscribe to the job loss insurance scheme for up to one or two years.
Under the ILOE scheme, the eligible employees will be compensated with a monthly cash benefit of up to 60 per cent of their average basic salaries of the 6 months prior to loss of employment.
Two plans were introduced as part of this scheme. In Category A, employees with a basic salary of Dh16,000 or below will have to pay Dh5 plus VAT per month (or Dh60 plus VAT for a year) for monthly compensation of up to Dh10,000 for three months maximum. For Category B, workers earning over Dh16,000 are required to pay Dh10 plus VAT a month (Dh120 plus VAT for a year) for monthly compensation of up to Dh20,000 for a maximum of three months.
It is also mandatory that the employee should be a legal resident of the country.
Dana Kansou pointed out that in case of job loss, the employee will be paid compensation every month, rather than one single payment of three months.
News Source: Khaleej Times