Penalties for employees failing to subscribe to Involuntary Loss of Employment (ILOE) insurance before June 30

HiDubai Newswire -

The deadline applies to all employees of both private companies and government entities.

The grace period for subscribing to unemployment insurance is coming to a close, and employees who fail to meet the June 30 deadline will face penalties.

Under Federal Decree-Law No. 13 of 2022, all employees in the public and private sectors are required to enroll in the unemployment insurance scheme. Subscriptions for the scheme began on January 1, 2023.

The Involuntary Loss of Employment (ILOE) insurance, which aims to provide financial security to residents who lose their jobs for reasons other than disciplinary action or resignation, is mandatory for all public and private sector employees under Federal Decree-Law No. 13 of 2022.

Employees who fail to subscribe before the June 30 deadline will face stiff penalties. Those who do not comply with the law will be fined, and unpaid penalties will be deducted from their salary or end-of-service benefits.

Here are three penalties and violations that have been specified in the law:

  1. Dh400 fine: For employees who fail to subscribe to the scheme before June 30, 2023.
  2. Dh200 fine: For failing to pay premiums for more than three months from the due date. (This violation will also lead to the cancellation of insurance certificate)
  3. Dh20,000 fine for every case: For employers who will be caught colluding with the insured to obtain unemployment insurance benefits

Benefits

Employees who are enrolled in the unemployment insurance scheme may receive up to 60% of their average basic salary in case of job loss due to reasons other than disciplinary action or resignation. The cash benefit is provided for a maximum of three consecutive months per claim, but the employee must have paid the premium for at least 12 consecutive months to be eligible to make a claim. In addition, proof of involuntary job loss must be submitted within 30 days, and other conditions apply.

How much does it cost?

Employees can sign up for the Involuntary Loss of Employment (ILOE) insurance through the ILOE portal or official app. The insurance requires a yearly payment of Dh63 (including VAT) for those earning a basic salary of Dh16,000 and below, and Dh126 a year for those earning more than Dh16,000. Payments can be made through various channels, including exchange centers, business centers, kiosks, bank apps, ATM machines, and other payment kiosks. Additionally, an SMS channel will be available soon.

Image Source: Khaleej Times via Syndicate