Insurance Product Value

To improve work relationship stability, MoHRE, Ministry of Human Resources and Emiratisation, compelled private sector establishments to pay the wages on time under the Wages Protection System. This came up because of the COVID-19 challenges that affected the global labor markets. As a penalty for the wage issue, authorities have raised the value of the insurance policy from AED 120 to AED 250 for every worker.

This new enforcement covers 30 months’ financial dues for workers in establishments that are not committed to paying wages. This includes non-compliant establishments that have tried all ways to reach the required bank guarantee.

The insurance policy provides the mandatory labor rights provided in Federal Law No. 8, issued in 1980, which includes vacation allowance, contract termination allowance, warning allowance, arbitrary dismissal allowance, and many others. The product also provides the value of flight tickets for the intended workers and caters to the transportation costs in the event of death. This applies to absconding cases and when the worker is within his insurance validity.

Source:https://www.mohre.gov.ae/en/media-centre/news/12/4/2021/value-of-the-insurance-product-increased-to-aed-250for-establishments-not-committed-to-paying-workers-wages.aspx

Part of ATB Legal’s Regulatory & Compliance practice.