59A7D41EB44EABC4F2C2B68D88211BF4 U.A.E Visa Rules and Procedures-Law updates -free legal advice: New employee insurance system to start on October 15 in UAE

Monday, October 15, 2018

New employee insurance system to start on October 15 in UAE


The Ministry of Human Resources and Emiratisation (MoHRE) has said that the issuance of employee insurance will begin on October 15.This comes as per the UAE Cabinet’s decision to scrap the compulsory bank guarantee and replace it with a low-cost insurance system, according to the ministry.

Aisha Bel Harfia, Assistant Undersecretary for Domestic Worker Affairs, said the ministry has taken all necessary measures to begin issuing insurance documents and refunding bank guarantees to the employers, starting from the aforementioned deadline.
The Ministry of Human Resources and Emiratisation (MoHRE) has said that the issuance of employee insurance will begin on October 15.

This comes as per the UAE Cabinet’s decision to scrap the compulsory bank guarantee and replace it with a low-cost insurance system, according to the ministry.

Aisha Bel Harfia, Assistant Undersecretary for Domestic Worker Affairs, said the ministry has taken all necessary measures to begin issuing insurance documents and refunding bank guarantees to the employers, starting from the aforementioned deadline.

Bel Harfia clarified that the insurance document for domestic workers will be issued upon submitting applications through either Tasheel or Tadbeer service centres. Insurance documents for private sector employees and domestic workers registered with the ministry will be issued through an insurance conglomerate that includes national insurance companies operating in the UAE, which have been chosen according to specific criteria.

The bank guarantee is replaced by a new insurance policy that costs Dh60 annually per worker, providing a coverage of Dh20,000 per worker covering their end-of-service benefits, vacation allowance, overtime allowance, unpaid wages, worker’s return ticket and cases of the work injury.

The insurance policy of domestic workers also covers the cost of replacing the worker in cases of his/her interruption of work, health issues or the desire (of the domestic worker) to cancel the working relationship, in addition to unpaid wages and the worker’s financial benefits such as end-of-service and leave allowances and overtime allowance, in case they have been not be paid by the employer, as well as a return ticket.

Bel Harfia said that the ministry will start refunding bank guarantees to employers, totalling about Dh14 billion as of October 15.

Bel Harfia added that the bank guarantees will be refunded to establishments when cancelling work permits of workers covered by these guarantees, which will thereby end the working relationship between the two parties or when purchasing the insurance policy upon renewal of the employee’s work permit, on the condition that the establishment has not committed violations related to non-payment of salaries during the last six months before the renewal of the expired permit.

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