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Updated December 2022
Working in the UAE’s private sector is an increasingly attractive proposition for many expats around the world. They come to the country by way of the UAE employment visa provided by the government and are ready to fill the available positions.
With many skilled workers and employees flying to the UAE, the government feels the need to regulate the employment quota in private sector companies to accommodate UAE nationals looking for employment opportunities.
Thus, the government passed the Emiratisation law as an instrument to supervise private-sector companies. Keep reading to find the details about the law.
What is Emiratisation law?
Emiratisation law is the rule implemented on UAE-based private sector companies to raise the participation of UAE nationals in the workforce. The law is a new Ministerial Decision (No. 279 of 2022), issued by the Ministry of Human Resources and Emiratisation (MoHRE).
The law is also a part of the NAFIS program — a government program to make Emirati human resources more competitive and provide them with the skills they need to work in the private sector.
This new law will come into effect on 1 January 2023.
The requirement of Emiratisation law
The rule stated that it is mandatory for private-sector companies to recruit Emirati employees with a minimum of 2% of the total skilled workers per year. This means that the company should have at least one Emirati worker for every 50 skilled workers (or less). An illustration of the requirement is as follows:
- 0-50 skilled workers: has at least 1 Emirati employee
- 51-100 skilled workers: has at least 2 Emirati employees
- 101-150 skilled workers: has at least 3 Emirati employees
- more than 150 skilled workers: has 1 Emirati employee for every 50 employees or less
Skilled workers criteria
Skilled workers, according to MoHRE, are workers who:
- belong to any of these 5 categories:
- legislators, managers, business executives
- professionals in scientific, technical & humanitarian fields
- technicians in scientific, technical and humanitarian fields
- writing professionals
- service & sales occupations
- have a secondary school certificate, its equivalent or higher
- have certificates attested by relevant authorities
- have a monthly salary of no less than AED 4,000
Penalties for non-compliance
Employers who fail to fulfil the minimum required rate of Emiratisation will be fined AED 6,000 per month per Emirati employee falling short of the quota. There will be an AED 1,000 increase per month per year if it continues to be the case.
If the company fails to pay the fines, its work permit applications may be suspended. Two consecutive years of violation can lead to the demotion of their company to the third category under the classification law.
Company classification in regard to Emiratisation law
The Ministry of Human Resources and Emiratisation (MoHRE) classifies companies into three categories. The categories will affect the incentives that the company receives in lieu of their compliance with the rules. The categories are:
Category 1
Companies are required to achieve at least one of the following objectives to fall under this category:
- increase their annual Emiratisation quotas at least three times above the target
- hire and train at least 500 UAE nationals annually
- being a small/medium company owned by a young UAE national, or
- being a qualifying training and employment centre.
As a reward, The MoHRE will set work permit fees at a maximum of AED 250 for two years. Employees from the UAE and the GCC will not be charged these fees.
Category 2
Companies that do not achieve the objectives required for category 1 yet still meet the Emiratisation quota will fall under category 2.
The MoHRE will set work permit fees for this category at AED 1,200 for two years. Employees from the UAE and the GCC will not be charged these fees.
Category 3
Companies that fail to comply with the Emiratisation quota.
The penalties mentioned above will be imposed on the companies under this category.
NAFIS scheme benefits
Since Emiratisation law is a part of the NAFIS program, any registered employer who supports the program will be eligible for:
- a reduction of employer pension contribution for UAE nationals, and
- salary contribution of up to AED 8,000 for each UAE national employed under the NAFIS scheme.
