Key Points You Need to Know about Emiratization
The UAE recently introduced a resolution to increase the percentage of UAE Nationals employed in the private and public sectors. This initiative referred to as Emiratization is part of the NAFIS federal programme and is set to bring a lot of changes in the whole of UAE, creating more jobs for the nationals. The Emiratization has come into force on 1 January, 2023. This initiative will enhance the participation of UAE nationals in the skilled professions and ensure their stability in work. Here are some key points to note.
Where is this resolution applicable?
Businesses and private sector companies that fall within the jurisdiction of the Ministry of Human Resources and Emiratization (MOHRE) will be where this new resolution would be applied. Offshore entities or free zone businesses that are not under the MOHRE jurisdiction are exempted. Necessary steps have to be taken by the relevant entities to increase the Emiratization of skilled jobs. A minimum annual quota of 2% for companies with more than 50 employees, 4% for banks and 5% for insurance companies have to be assured. By 2026, the skilled workforce has to reach a 10%, creating a minimum of around 12,000 jobs annually for UAE skilled workers.
Only UAE nationals hired from September 2021 will be considered in determining the numbers. As per the Resolution, companies must hire one UAE national for every 50 skilled employees, 2 UAE nationals for every 51-100 skilled employees, 3 UAE nationals for every 101-150 skilled employees, and for businesses with more than 150 skilled employees, one UAE national for every 50 skilled employees must be hired. Entities that have less than 50 employees will not be impacted by the new resolution.
Who is considered a skilled worker?
An employee will be considered a skilled worker if they:
- are a professional within the top 5 categories according to the MOHRE classification including:
- legislations, managers and business executives
- professionals in scientific, technical and humanitarian fields
- technicians in scientific, humanitarian and technical fields
- writing professionals
- services and sales occupations
- have certification of higher education duly attested
- earn a minimum salary of AED 4,000 per month.
What happens if the entities do not comply?
- A penalty will be levied on non-compliant entities. For every position short of the Emiratization requirements, up to AED 6,000 will be charged. Until 2026, the fines are scheduled to increase by AED 1,000 per year.
- In case of default on the payment of applicable penalties, the MOHRE gets the authority to suspend the issuance and renewal of work permits of the employers.
- Non-compliance of the resolution for 2 years will result in the demotion of the company to the third category of the Classification Law. This will in turn may affect the company’s reputation and also an increase in the work permit fees.
What happens is companies forge hiring documents?
According to a warning issued by the Ministry of Human Resources, if companies forge hiring documents to comply with the Resolutions, a minimum fine of AED 20,000 and a maximum of AED 100,000 may be levied. Also, all the benefits given to the concerned company by NAFIS would come to a halt and the benefits that have been already distributed would have to be returned. Further, if the hired Emirati employee fails to show up at work or does not display work commitment, and the employer fails to inform the authorities, fine would be levied.
Are there any incentives in parallel?
There are of course certain benefits when the private sector business exceeds their Emiratization targets. MOHRE may apply 80% discount of their service fees in this case. Under the NAFIS programme, certain incentives such as a 5-year Government subsidized pension plan for Emirati employees on behalf of the company, salary support for Emirati employees, and a monthly grant for children of Emirati employees in the private sector are given.
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