This week the spotlight is on employment developments in the UAE, where the country’s Human Resources and Emiratisation Ministry has announced that from 14 October, a worker’s insurance scheme will replace the existing bank guarantees system. The new insurance scheme will apply to all private-sector employees, including domestic workers.
Instead of a fixed amount of 3,000 AED which typically must be paid against every work permit application, employers will pay an insurance premium of 120 AED per person, for a two-year work permit. This will provide an insurance coverage of up to 20,000 AED in lieu of unpaid wages, return ticket and against work-related injuries, among other benefits.
Employers will be able to recover earlier deposited bank guarantees only on the cancellation or renewal of a work permit and after the payment of an insurance premium. They must be free from any wages-related violations for at least six months before the renewal date of the work permit.