Insurance system for workers

On 15 October 2018, Ministry of Human Resources and Emiratisation (MoHRE) implemented the current insurance policy for workers. The insurance policy, called Taa-meen, was approved by the UAE Cabinet in June 2018 and it is intended to be an alternative option for employers keeping a bank guarantee of AED 3,000 while recruiting a new worker.

• Bank guarantee and workers’ protection insurance scheme

According to Ministerial Resolution No. 318 of 2022 Concerning Bank Guarantees and Employees Protection Insurance Scheme (PDF, 461 KB), establishments may choose one of the following two options for the workers:

1. Procure a bank guarantee, duly issued from a bank operating in the UAE. The bank guarantee must not be less than AED 3,000 for each worker, valid for one year form its issue date, renewable automatically and paid upon MoHRE’s request, without any restrictions.
2. Buy an insurance policy for the worker.

Cost of the new insurance policy

An insurance policy’s costs depend on the product as shown below:

A policy is valid for 30 months.

Where can insurance be procured?

The employer can purchase an insurance policy form the ‘Insurance pool’.

Whom does it protect?

It protects the benefits and rights of the private sector workers and domestic helpers.

How does the new insurance policy work?

• For workers currently in service

  For workers who are already secured under the bank guarantee of AED 3,000, the employer has the option to either change them into the new insurance system or keep them under the old bank guarantee system. However, the employer can shift current workers under the new insurance system only after renewing their permits, not before.

   

• For new workers

 Upon recruiting a new worker, the employer has the option to either submit AED 3,000 as bank guarantee on behalf of the worker, as per the rules and regulations of the bank guarantee system, or insure them under the new insurance policy.

Coverage and limit of the policy

In case of a company’s bankruptcy or failure to pay the workers’ benefits, the new policy will provide a maximum insurance coverage of AED 20,000 per worker. It will cover any labour entitlements mentioned in Federal Decree Law No. 33 of 2021 Regarding the Regulation of Employment Relationship, as amended and its Executive Regulations. It will also cover domestic labour entitlements, provided for in Federal Law No. 10 of 2017 on Domestic Workers, as amended and the resolutions issued for its execution.

For domestic workers, the policy covers the following:

• the cost of worker’s replacement, in case of discontinuation of work
  • if the worker is medically unfit
  • if the worker decides to terminate employment unilaterally
• unpaid wages and entitlements
• service benefits
• unpaid vacations and overtime
• airfare to home country and work injuries’ compensations.

General provisions

The coverage of the dues by the insurance company does not relieve the employers from their responsibilities. Employers would still have to pay back to the insurance company all dues which the latter paid to the worker. 

If the employer does not repay the insurance company, MoHRE will suspend the employer’s file and freeze new work permits. It will also require the employer to provide AED 3,000 bank guarantee upon renewal of the existing work permits. (Note: this provision applies only to firms; it does not apply on domestic labour).

Note that health insurance is not covered by this policy.

How to get the bank guarantee refund and register in the new insurance policy?

Firms can reclaim the bank guarantee money if the:

• work permit of the worker is cancelled, and the firm can provide proof of his departure from the UAE
• worker is deceased and has either been repatriated to his home country or buried in the UAE
• worker has been transferred to the sponsorship of a new employer.

Additionally, firms can reclaim the bank guarantee in any other situation in which the employer proves that the worker’s permit has been cancelled and all his entitlements have been paid.

The insurance document and bank guarantee refund can be processed and obtained from business services centres  and domestic labour recruitments centres  and also through the MoHRE app available on Google Play and App Store.

Firms can either reclaim the bank guarantee money when an employment contract is terminated or when a work permit is renewed. However, they must have purchased the new insurance policy before the refund is paid out. Note that any company with violations such as failing to pay salaries in the last six months will not be eligible for a refund.

Source: Ministry of Human Resources and Emiratisation (MoHRE).

Unemployment Insurance scheme