The UAE has issued new rules aimed at protecting the rights of private sector workers and enhancing the stability and competitiveness of the country's employment market.
Dr. Abdulrahman Al Awar, Minister of Human Resources and Emiratisation, has issued the Ministerial Resolution No. 318 of 2022 regarding bank guarantees and employees' protection insurance scheme in the private sector.
As per the latest rules, establishments can now choose between a bank guarantee or an insurance policy in order to fulfil their legal obligations towards their employees.
- The first option is to provide a bank guarantee of at least AED 3,000 for each worker, paid through a UAE-based bank, provided that the guarantee is valid for one year, can be automatically renewed and paid at the Ministry of Human Resources and Emiratisation's demand, without any other restrictions.
- The second option is a 30-month insurance policy, with a monthly value of AED 137.50 for each skilled worker, AED 180 for each low-skilled worker and AED 250 for each worker in high-risk establishments that are not registered with the Wages Protection System (WPS).
- The insurance coverage amounts to up to AED 20,000, which will cover the wages of the worker's last 120 working days, the end-of-service gratuity, the worker's flight expenses to return home, and in the event of the worker's death, the cost of repatriating the body to his/her home country.
The resolution outlines four cases where the employer may submit a request to reclaim the employee's bank guarantee: in the event of cancellation of the employee's work permit and providing proof of their departure from the country; in case of the employee's death and providing proof of the body's repatriation or burial in the UAE; if the employee is transferring to a new employer; or any other case in which the employer provides proof of cancellation of the employee's work permit and payment of entitlements due to the employee.
The Ministry of Human Resources and Emiratisation reserves the right to refuse to reimburse the bank guarantee to the employer in two cases – if the employer is a party to a collective labour dispute until the employee's entitlements are settled; or if evidence of due fines against the establishment is proven, or if the establishment's work permits have been suspended.
HE Dr. Abdulrahman Al Awar, Minister of Human Resources and Emiratisation, issued Ministerial Resolution No. 318 of 2022 regarding bank guarantees and workers’ insurance in the private sector. Learn more via our website https://t.co/yCzNGe81xq #MOHRE pic.twitter.com/N4nqCKOSR9— وزارة الموارد البشرية والتوطين (@MOHRE_UAE) August 9, 2022