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UAE government expands salary support scheme for citizens in private sector

United Arab Emirates
11.01.23
3
Written by
Al Tamimi & Co, the leading choice for companies locally, in the Middle East region and from around the globe
The UAE government recently announced a decision to further expand salary support for nationals under the UAE national Salary Support Scheme.

The scheme aims to boost the government’s campaign to integrate UAE nationals into the private and banking sectors (the so calledEmiratisation’ campaign) by providing allowances, bonuses, and other monetary incentives to UAE national employees. This is in line with the government’s aim to increase the proportion of UAE nationals in the private sector to at least 10% by 2026. 

Scope of the new support plan

The UAE government has announced that the decision covers all UAE national employees in the private sector irrespective of the date of their recruitment, including those who were hired both before and after the introduction of the NAFIS programme (the federal government programme aimed at increasing UAE nationals’ employment in the private sector).  

According to the government’s announcement, financial support has been made available so that monthly ‘top-up’ allowances of up to a maximum of AED 7,000 for holders of a bachelor’s degree, AED 6,000 for diploma holders, and AED 5,000 for secondary level diploma holders or less can be earned for the first five years of employment, provided that the employee’s monthly basic salary is less than AED 30,000. 

The salary top-up is calculated based on the difference between the employee’s current monthly salary and the designated salary for each category. The minimum salary top-up is AED 1,000. 

Other support

UAE nationals working in the private sector who have children will also be entitled to an allowance of AED 600 for each child, provided that their total monthly salary does not exceed AED 50,000. The support will be provided for a maximum of four children for a period of five years. 

The decision also provides temporary financial aid for UAE nationals who lose their job due to circumstances beyond their control. The temporary support period has been extended to 12 months, and the benefit period should not exceed six consecutive months. 

Failure to meet the Emiratisation percentage

From January 2023, private sector companies with more than 50 skilled employees that do not reach the Emiratisation percentage of 2% annually will be subject to fines. The UAE labour authorities have indicated that the Emiratisation percentage is retrospective, i.e. if an employer does not meet the Emiratisation target by 1 January 2023 then a fine will be imposed for 2022. 

Companies who do not meet the Emiratisation target will be subject to a fine of AED 6,000 per month per quota position not filled by a UAE national. It is acceptable for an employer’s percentage of UAE nationals to temporarily fall below the required target if the period is no more than two months. 

The Emiratisation target is cumulative, so in year 2022 the company should have 2% Emiratisation, in year 2023 it should be 4% and so on. 

Penalties

The UAE Cabinet further approved a Resolution regarding penalties and violations relating to the Emiratisation programme. The Resolution implemented various penalties in the event that companies or the beneficiary UAE national employees submit incorrect documents or data to evade or circumvent the Emiratisation system, or to obtain services or benefits under the system. Some of the penalties include: 

  • a fine not less than AED 20,000 and not more than AED 100,000; and 
  • stopping the support to the beneficiary employee, and recovering any amounts disbursed to them. 

 

Employers should ensure that they familiarise themselves with these new requirements, so that their UAE national employees are appropriately provided for as required under the law. 

For more information about compensation and benefits

Authors
Samir Kantaria
Samir Kantaria
Partner - Bahrain
Al Tamimi & Co (Bahrain)
Ivor McGettigan
Partner - United Arab Emirates
Al Tamimi & Co (UAE)
Gordon Barr
Partner - United Arab Emirates