New Employee Insurance System coming up in Dubai

Dubai Expat Blog

Living in Dubai

New Employee Insurance System in Dubai
The Ministry of Human Resources and Emiratisation (MoHRE) has announced that new Employee Insurance system will commence from October 15, 2018

This comes as per the UAE Cabinet’s decision to scrap the compulsory bank guarantee and replace it with a low-cost insurance system.

According to the report, the ministry has taken all necessary measures to begin issuing insurance documents and refunding bank guarantees to the employers.

Employee Insurance Options in Dubai:

The establishments registered with the ministry will have two options.

The first is to buy insurance that can be issued immediately when typing the work permit application at Tasheel or other establishments that can complete their own applications using the Tasheel e-service.

The other option is to submit a Dh3,000 bank guarantee on behalf of the employee, as per the rules and regulations of the current bank guarantee system, which will be available alongside the new insurance system.
This will allow employers to pick the option that suits them.

The insurance document for domestic workers will be issued upon submitting applications through either Tasheel or Tadbeer service centres. Insurance documents for private sector employees and domestic workers registered with the ministry will be issued through an insurance conglomerate that includes national insurance companies operating in the UAE, which have been chosen according to specific criteria.

The bank guarantee is replaced by a new insurance policy that costs Dh60 annually per worker, providing a coverage of Dh20,000 per worker covering their end-of-service benefits, vacation allowance, overtime allowance, unpaid wages, worker’s return ticket and cases of work injury.

The insurance policy of domestic workers also covers the cost of replacing the worker in cases of his/her interruption of work, health issues or the desire (of the domestic worker) to cancel the working relationship, in addition to unpaid wages and the worker’s financial benefits such as end-of-service and leave allowances and overtime allowance, in case they have been not be paid by the employer, as well as a return ticket.

The ministry will start refunding bank guarantees to employers, totaling about Dh14 billion as of October 15, 2018.

The bank guarantees will be refunded to establishments when cancelling work permits of workers covered by these guarantees, which will thereby end the working relationship between the two parties or when purchasing the insurance policy upon renewal of the employee’s work permit, on the condition that the establishment has not committed violations related to non-payment of salaries during the last six months before the renewal of the expired permit.


Using WP Show Posts


New UAE Visa Rules come into effect

Leave a Reply