Are you aware of the impending deadline that could impact your job security in the UAE? The clock is ticking, and it’s crucial to understand the ins and outs of the Involuntary Loss of Employment (ILOE) scheme (Unemployment Insurance), which has been extended until October 1. This scheme is not just an option – it’s mandatory for employees in the private sector, federal government departments, and free zones. So, why is it essential, and what do you need to know to avoid penalties?
What Is ILOE & Is It Mandatory?
Yes, it’s mandatory! The ILOE scheme is a safety net for your career in the UAE. Failing to subscribe could result in fines. Over 5 million people have already secured their job futures by subscribing to this low-cost insurance scheme, which provides financial support during tough times.
How Does The Scheme Work?
You pay a minimal premium to subscribe to ILOE. If you lose your job for reasons other than disciplinary action or resignation, you’ll receive financial support for up to three months. But remember, you must be subscribed for at least 12 months to be eligible for compensation.
Who Needs To Subscribe & How?
Employees in the UAE, whether registered with the Ministry of Human Resources and Emiratisation (MoHRE) or not, need to be a part of this scheme. Companies can even subscribe on behalf of their employees by submitting their trade license and a request letter.
Understanding The ILOE Plans
There are two plans: Category A (basic salary AED 16,000 or below – costs AED 5 + VAT per month to subscribe) and Category B (basic salary above AED 16,000 – costs AED 10 + VAT per month to subscribe). Both offer 60% of your basic salary, with varying maximum monthly benefits, and you can choose to pay your insurance premiums monthly, quarterly, semi-annually, or annually.
The benefits last for up to three months but cease if you find a new job or leave the UAE. The Compensation Benefit for category A: 60% of your basic salary – up to AED 10,000 per month. The Compensation Benefit for category B: 60% of basic salary – up to AED 20,000 per month
Are There Any Penalties For Non-Compliance?
Short answer – Yes. The UAE government takes this scheme seriously. If you don’t subscribe by October 1, you’ll face an AED 400 fine. But it doesn’t end there; failing to pay premiums for more than three months after subscribing can result in an AED 200 penalty, and your insurance certificate could be canceled.
How Will Fines Be Collected?
Don’t think you can dodge these fines. If you don’t pay up within three months of the due date, the MoHRE will make sure those fines are collected, whether through your salary, gratuity, or other approved methods.
The Impact This Can Have On Your Future Job Prospects
Remember, ignoring these fines can have a significant impact on your future job prospects in the UAE. You won’t be eligible for a new work permit until you’ve cleared all dues within the specified timeframe.
Who’s Exempt From ILOE?
Certain categories are exempt from the scheme, including investors, domestic helpers, temporary contract workers, juveniles under 18, and retirees who are entitled to a pension and joined a new job.
Subscribing is simple, and you have various channels to choose from. You can do it for free through the ILOE website and app or use other channels like Al Ansari Exchange, Tawjeeh and Tasheel business centres, Etisalat (coming soon), kiosks (upay and MBMEPay), and Botim (coming soon).
Claiming Compensation: Key Conditions
To claim compensation, you need to meet specific conditions, including a minimum subscription period of 12 months, timely payments, no voluntary resignation, no dismissal due to disciplinary reasons, and submitting your claim within 30 days of termination or labor complaint settlement in court. Additionally, you must not have an existing absconding complaint from your current or previous place of work.
In a nutshell, subscribing to the ILOE scheme is essential for your financial protection in the UAE job market. Don’t wait until the last minute – secure your future today!