UAE’s objective to increase Emiratization percent in the private sector: Plan in action
Towards the end of 2022, the UAE government in accordance with its objective to increase the presence of the UAE nationals in the private sector minimally by 10% in 2026, has decided to extend the salary support under the UAE national Salary Support Scheme to UAE citizens working in the private sector. The recent legislations have been introduced with the objective of attracting more Emiratis to the private and banking sectors as Emirati employees will considering the recent changes be entitled to several benefits; the following include bonuses, allowances, and other financial benefits.
Salary support scheme applicable to private sector
The recent extension of the UAE Salary Support Scheme to Emirati employees in the private sector entitles them to an allowance if their salary does not exceed 30,000 dirhams per month. According to the recent legislation, UAE employees are entitled to the maximum of:
- Holders of bachelor’s degree: 7,000 dirhams
- Diploma holders: 6,000 dirhams
- Secondary level diploma holders: 5,000 dirhams
The following allowance is due to all Emirati employees in the private sector, even to those employed prior to the introduction of the NAFIS program.
However, the recently introduced legislation as well includes other benefits:
In addition to the allowance mentioned above, UAE employees in the private sector whom salary is not more than 50,000 dirhams are entitled to an allowance of 600 dirhams for each of their children However, the following allowance will be provided only for an employee with a maximum of 4 children and will be allocated for 5 years.
The newly introduced rules as well have extended the period of financial support to 12 months for those who have suffered from the loss of their jobs and the following solely applies to employees who lost their jobs for reasons out of their own control, therefore the following doesn’t apply for instance to those who have lost their jobs due to the commission of an offence that lead to the termination of their contract.
The following steps taken are in line with the federal government to increase the percent of UAE employees in the private sector, and as the UAE government takes this goal seriously, it has put in place penalties for non-compliance by the private sectors with the current legislation.
Effective reinforcement of the Emiratization percentage requirement:
From the beginning of this year, in case of failure to meet the required Emiratization percentage in the private sector, and the following applies to companies with more than 50 skilled employees if they fail to reach the Emiratization percentage of 2% annually. As per the federal government’s recent decision the companies are then subjected to fines. The Emiratization percentage is supposed to increase gradually till it reaches to the end goal which is of 10% by 2026.In 2022 it’s of 2% and it’s supposed to double by 2023 and so on. The applicable fine that is imposed on companies who fail to reach the required percentage is of 6,000 dirhams and it’s calculated monthly and per quota position that is not filled by an Emirati employee and is payable at the beginning of the following year, for example the fine for the year 2023 is payable in the beginning of year 2024.
However, the federal government allows failure to meet the percentage in a temporary manner if the following does not exceed the period of 2 months.
In addition to the aforementioned fine, the UAE government as well is aware of the risks that such benefits can create. As a result, penalties are imposed in the case where an Emirati citizen provides false documents in order to unlawfully obtain benefits due under the NAFIS program or if an employer provides false data regarding the Emiratization percentage with the intention of evading the payable fine.
The applicable penalties:
Cabinet Resolution no. (95) of 2022 Regarding Penalties and Violations Relating to the Emirati Cadres Competitiveness Council Initiatives and Programs that has been approved by the UAE Cabinet by the end of 2022 details the applicable penalties in the case of violations regarding the veracity of submitted documents and data.
The following are some of the potentially applicable penalties in the case of violations committed by employees and employers regarding the NAFIS program:
Administrative fine of not less than (20,000) twenty thousand dirhams and not more than (100,000) one hundred thousand dirhams per employee.
Terminating the support and refunding all amounts spent.
The content of this article should not be taken as legal consultation. In case you are involved in any problems related to the following subject or have any queries, Hassan Al Reyami Advocates and legal consultants would be delighted to address your concerns during a 30-minute free legal consultation session offered to you.