The Dubai Multi Commodities Centre, the free zone focused on commodities and trade, signed a master service agreement with Dubai Insurance Company to provide a new employee protection insurance programme for all DMCC and member company employees.
The programme will offer higher standards of protection for employees of companies operating in the free zone, which incorporates Dubai's Jumeirah Lakes Towers district, in the event that employers default on the payment of salaries and end of service benefits or fail to meet repatriation costs, the DMCC said.
The scheme will be introduced across the zone from this month and will replace the current "bank guarantee" system where companies are required to provide a security deposit of Dh3,000 per employee.
“For DMCC and all of our member companies, people are our greatest asset," said Ahmed Bin Sulayem, executive chairman and chief executive of the DMCC.
"It is our responsibility to support those who contribute to our success by offering them an enhanced level of protection, particularly in these unprecedented times."
The initiative reduces the cost of doing business for DMCC member companies and will help spur growth of those operating in the free zone, he said.
It will cover about 17,000 DMCC member companies employing 60,000 people, Abdellatif Abuqurah, Dubai Insurance Company's chief executive, said.
A UAE government initiative to replace security deposits for employees with a broader programme offering benefits of up to Dh20,000 per worker first came into effect in 2018.
Free zone operators have also been gradually replacing their deposit schemes with more comprehensive insurance packages.
DMCC also recently announced a series of measures to help member companies cope with the economic impact of the coronavirus. These include rent waivers for up to two months for any business that had been affected by a Dubai Economy directive to temporarily close.
It also waived a number of penalties for the rest of the year and reduced company set-up fees by 50 per cent, which rises to 80 per cent for shareholders who are resident in Jumeirah Lakes Towers.