UAE to raise employee insurance premium for companies failing to pay salaries on time

The UAE’s Ministry of Human Resources and Emiratisation (MoHRE) has urged private sector companies to pay its employees their salaries on time, as per the framework of the existing national Wage Protection System.

The ministry said on Monday that businesses which do not pay salaries on time will have their employee’s insurance policy coverage increased from Dhs120 to Dhs250, reported state news agency WAM.

The new insurance policy covers the financial entitlements of the employees for 30 months, as per the wage protection system, to maintain labour stability and ensure the rights of employees to their wages.

The insurance policy will ensure the rights of all workers as stipulated in Federal Law No.8 for 1980 on regulating labour relations, along with its amendments and related resolutions.

The policy will cover the value of travel tickets for workers who are absent from work, provided that they report their absence during the insurance coverage period. It will also cover the transportation costs of a worker’s body in the event of their death.

In 2018, MoHRE implemented a new insurance policy for employees called Taa-meen, that was intended to be an alternative option to employers keeping a bank guarantee of Dhs3,000 upon recruiting a new employee. Taa-meen will provide a maximum insurance coverage of Dhs20,000 per employee and protect the employee from the company’s bankruptcy or failure to get their benefits.

In a landmark development for private sector employee salaries in the UAE, President Sheikh Khalifa bin Zayed Al Nahyan issued a decree last year stating that men and women will have to be paid equal salaries if they are doing the same work.

Read: UAE President issues decree for private sector to pay equal salaries to men and women