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UAE makes job loss insurance mandatory for private sector workers
The Involuntary Loss of Employment (ILOE) scheme requires most employees to pay a monthly premium for a crucial financial safety net.
The UAE now requires private sector and federal employees to subscribe to a mandatory unemployment insurance scheme. This programme provides a cash benefit for up to three months if you lose your job, impacting financial planning for expatriate workers.
The UAE has made it mandatory for most private sector and federal government employees to subscribe to an unemployment insurance scheme. This Involuntary Loss of Employment (ILOE) plan provides a cash safety net for up to three months if a worker loses their job, changing how residents manage financial risk. The programme is managed by the Ministry of Human Resources and Emiratisation (MoHRE) and aims to provide financial stability to residents during periods of unexpected unemployment. ## What changed Effective from January 1, 2023, eligible employees must personally subscribe to the ILOE insurance package. The scheme provides a monthly cash benefit for a maximum of three consecutive months per claim in the event of job loss. The cost and benefits are divided into two categories: - **Category A:** For employees with a basic salary of AED 16,000 or less. The insurance premium is AED 5 per month (plus VAT). The maximum monthly compensation is capped at AED 10,000. - **Category B:** For employees with a basic salary exceeding AED 16,000. The insurance premium is AED 10 per month (plus VAT). The maximum monthly compensation is capped at AED 20,000. In both cases, the compensation is…