Insurance coverage

UAE: Employers must provide insurance coverage up to Dh20,000 – News

According to Mohre’s website, the policy was put in place to protect workers in the event of a company’s bankruptcy or non-payment of employee benefits.

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Published: Mon 31 Oct 2022, 2:57 PM

Employers in the United Arab Emirates are required to provide insurance coverage of up to Dh20,000 for each worker to protect them in the event of a business going bankrupt or non-payment of workers’ benefits, according to authorities.

The UAE government portal has clarified on its website that instead of maintaining a bank guarantee of Dh3,000 with the Ministry of Human Resources and Emiratization (Mohre), employers can choose to take out insurance for the workers.

“Called Taa-meen, the insurance will provide maximum insurance coverage of Dh20,000 to each worker and protect them from company bankruptcy or failure to collect their legitimate dues. If the insurance company pays the worker, the employer will have to reimburse the same amount to the insurance company,” the authorities said.

On October 15, 2018, the Mohre implemented the current insurance policy for workers. The insurance policy, called Taa-meen, was approved by the UAE Cabinet in June 2018 and is intended to be an alternative option for employers maintaining a bank guarantee of Dhs 3,000 when recruiting a new worker.

Bank guarantee and worker protection insurance scheme

According to Ministerial Order No. 318 of 2022 concerning Bank Guarantees and Employee Protection Insurance Scheme (PDF, 461 KB), establishments can choose one of the following two options for workers:

1- Obtain a bank guarantee, duly issued by a bank operating in the UAE. The bank guarantee must not be less than 3,000 Dh for each worker, valid for one year from its date of issue, automatically renewable and paid at the request of Mohre, without any restriction.

2- Buy an insurance policy for the worker.

Cost of new insurance policy

The costs of an insurance policy depend on the product as shown below:

Insurance premium (for each certificate/transaction)

>> Skilled labor – 137.50 Dh

>> Unskilled labor – Dh180

>> High-risk establishments, non-compliant with the wage protection system – Dh250

>> Domestic workers – Dh105

The employer can take out an insurance policy with the “insurance pool”, valid for 30 months.

The insurance scheme protects the benefits and rights of private sector workers and domestic helpers.

How does the new insurance policy work?

The policy works on workers currently in service, according to authorities.

“For workers who are already protected by the bank guarantee of 3,000 Dh, the employer has the option of transferring them to the new insurance system or keeping them under the old bank guarantee system. However, the employer can only transfer current workers under the new insurance scheme after their permits have been renewed, not before,” officials explained on the government portal.

Policy coverage and limit

In the event of company bankruptcy or non-payment of workers’ benefits, the new policy will provide maximum insurance coverage of Dh20,000 per worker. It will cover all the rights at work mentioned in Federal Decree-Law No. 33 of 2021 regarding the regulation of the employment relationship, as amended and its implementing regulations. It will also cover the rights of domestic work, provided for in Federal Law No. 10 of 2017 on domestic workers, as amended and the resolutions made for its execution.

For domestic workers, the policy covers the following:

>>The cost of replacing the worker, in the event of work stoppage

>> If the worker is medically unfit

>> If the worker unilaterally decides to terminate his employment

>> Unpaid wages and rights

>> Service Benefits

>> Unpaid leave and overtime

>> Airfare to home country and Workers Compensation.

The coverage of contributions by the insurance company does not relieve employers of their responsibilities. Employers will still have to reimburse the insurance company for any contributions it has paid to the worker.

If the employer does not reimburse the insurance company, Mohre will suspend the employer’s file and freeze new work permits. It will also require the employer to provide a bank guarantee of Dh3,000 when renewing existing work permits. (Note: this provision only applies to businesses; it does not apply to domestic work).