UAE unemployment insurance (ILOE): what employers should know
Most private-sector and federal government employees in the UAE must hold Involuntary Loss of Employment (ILOE) insurance. The employee pays it, but HR gets the questions. Here are the rules in one place.
The short answer
Employees subscribe and pay themselves: AED 5 a month (plus VAT) if their basic salary is AED 16,000 or less, AED 10 a month (plus VAT) above that. After at least 12 months of subscription, someone who loses their job for reasons other than discipline or resignation can claim 60% of their average basic salary for up to 3 months, capped at AED 10,000 or AED 20,000 a month by category.
Not subscribing within the deadline costs a AED 400 fine; premiums unpaid for more than three months cost AED 200 more.
Who must subscribe
- Private-sector employees, including free zone employees
- UAE nationals and residents in federal government jobs
- Exempt: investors who own their business, domestic workers, temporary contract workers, under-18s and retirees who receive a pension and have taken a new job
- New employees must subscribe within four months of starting
Who can claim
- At least 12 months of continuous subscription
- Job lost for reasons other than resignation or dismissal for discipline
- Claim filed within 30 days of losing the job, or of the end of a labour complaint about it
- The claim stops when the person finds a new job or leaves the country
What HR should do
- Tell new joiners about ILOE in onboarding and when the deadline falls
- Ask for the policy certificate and keep it in the employee file
- Some employers pay the premium as a benefit; if you do, put it in the contract or the policy
- Unpaid fines can be deducted from end-of-service dues or block a new work permit, so check before the final settlement
Sources
- UAE government portal (u.ae): unemployment insurance scheme
- Gulf News: how to enrol in the ILOE scheme and avoid fines
- ILOE: Involuntary Loss of Employment insurance
Rules change. Check the official text, or ask your accountant or lawyer, before you rely on a figure.
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