The scheme is a boost to domestic workers, such as maids, who already had their benefits upgraded in August 2017 when the UAE introduced the UAE Domestic Workers Law. Photo: Reuters
The scheme is a boost to domestic workers, such as maids, who already had their benefits upgraded in August 2017 when the UAE introduced the UAE Domestic Workers Law. Photo: Reuters
The scheme is a boost to domestic workers, such as maids, who already had their benefits upgraded in August 2017 when the UAE introduced the UAE Domestic Workers Law. Photo: Reuters
The scheme is a boost to domestic workers, such as maids, who already had their benefits upgraded in August 2017 when the UAE introduced the UAE Domestic Workers Law. Photo: Reuters

Domestic workers and employers in UAE to benefit from new low-cost employee insurance policy


Alice Haine
  • English
  • Arabic

A new low-cost insurance policy for private sector employment - set to be rolled out this month - will give employers a ‘significant’ financial boost and increase job security for all vulnerable low-income employees, including domestic workers, analysts said.

The Dh60 annual policy payable by employers to protect their staff’s benefits will go into effect from October 15 and will replace the Dh3,000 bank guarantee companies are currently mandated to deposit for each new hire. It can also be applied to domestic workers, such as housemaids, cooks and gardeners, said Sara Khoja, a partner in the employment team at law firm Clyde & Co in Dubai.

“It will potentially return significant amounts of money to large employers who are currently providing Dh3,000 in cash deposits per employee. It also provides more protection for employees in terms of final payments if their employer refuses to pay or is declared bankrupt,” said Ms Khoja. “Employers will benefit from greater liquidity and employees will have more protection in the event of an employer failing to pay a court judgment or being insolvent.”

The new UAE Cabinet-approved legislation was first unveiled by Sheikh Mohammed bin Rashid, Prime Minister and Ruler of Dubai, in June. Then on Wednesday, Nasser Al Hamli, Minister of Human Resources and Emiratisation (MoHRE), confirmed the changes will take effect from October 15.

The insurance policy protects all UAE employee's workplace perks - such as end of service benefits, holiday allowance, overtime allowance, unpaid wages, return air tickets and cases of work injury – in the event a business collapses or refuses to pay a staff member what they are due. Under the new rules, the maximum payout is capped at Dh20,000 per person.

Marcin Kubarek, manager of knowledge and content at Fragomen Worldwide, said while the insurance premium costs Dh60 per year, the work permits issued by the MoHRE are valid for two years, meaning employers must pay Dh120.

___________

Read more:

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The scheme will particularly benefit low-income workers, who previously had little or no protection in the event of redundancy or a salary being withheld.

“The guarantee was only Dh3,000 and that was usually a nominal amount that could cover a ticket home,” says Ms Khoja. “The 20,000, whilst a cap, is a significant improvement in providing some cover where there was none before.”

Ms Khoja said the scheme also covers domestic workers, who had their benefits upgraded in August 2017 when the UAE introduced the UAE Domestic Workers Law. That put in place a number of minimum statutory requirements including a 14-day end of service gratuity for each year of service, one day off a week, 30 days’ leave a year and a return flight home every two years. The domestic workers law applies to 19 occupations including housemaids, cooks, gardeners and drivers.

The new insurance is also expected to offer families sponsoring maids cover in case a maid absconds.

"Those who employ domestic helpers will be able to get compensation in case of the worker's sickness, absence from work or desire to change the employers," said Mr Kubarek.

Experts were divided on whether the cost of sponsoring a domestic worker will stay the same. Mr Kubarek said domestic worker employment falls under the purview of the MoHRE, therefore the overall costs of recruitment "will drop significantly, making the sponsorship more affordable for local and foreign families".

However, Ms Khoja said the cost of sponsoring a domestic worker will remain the same, but from October 15 sponsors will have the same option as other employers of either paying the Dh3,000 deposit or paying 60 per year for the scheme.

For employees looking to file a grievance, Ms Khoja said employees cannot make a direct claim on the policy. Instead, an employee must file a claim at the Labour Court or complain to their local labour officer.

“The Ministry can then draw on the insurance policy to pay the employee,” said Ms Khoja.

Keren Bobker, a senior partner with financial advisory Holborn Assets and a consumer columnist for The National, said while Dh20,000 sounds like a large sum, "it will not cover the full amount owed in all cases" – particularly for higher earners.

“It should however, be sufficient for the lower paid who are often the ones who lose out under the present system,” she said.

Mr Kubarek said the capped coverage would also not be enough to cover serious work-related injuries, or instances where employers owe greater amounts of money to their workers.

"However some of these may be covered by alternative insurance policies the employers have in place," he said.

Concerns were also raised over whether the Dh60 will be enough to fund the insurance scheme, which will be managed by Dubai Insurance Company.

“Employee protections depend on the funding of this insurance scheme and so it is important to see how the scheme operates in practice and how well funded it is,” said Ms Khoja. “It remains to be seen how often the scheme will have to be called upon to fund employee's final entitlements.”

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__________

Those who will definitely benefit financially are any employers that have already deposited a bank guarantee for their staff. A Wednesday statement from the MoHRE said about Dh14 billion was held in employee deposits, which will be released back to companies.

"Employers will be able to recover earlier deposited bank guarantees only upon the cancellation or renewal of a work permit, and after the payment of an insurance premium," said Mr Kubarek. "They must be free from any wages-related violations for at least six months before the renewal date of the work permit."

Ms Bobker says the cost difference per employee from Dh3,000 to Dh60 could be substantial for larger employers.

“It should enable them to take on more staff with lower overheads and I hope it will reduce the number of companies that still try and illegally charge their staff for arranging their visas.”

David Mackenzie, managing director of the GCC recruitment consultancy Mackenzie Jones Group, said injecting Dh14bn back into the economy will be a huge stimulus.

"Companies can use that money to invest into other elements of the business. It also encourages people to set up and hire people without having a big upfront cost," he said, adding that companies hiring new staff this month are still paying the Dh3,000 bank guarantee fee.

Once that stops, business owners such as Matt Stuart, the chief commercial officer of hotel room wholesaler Stuba, based in Jumeirah Lake Towers Dubai, will benefit.

“Anything that reduces the upwards pressure on costs of doing business in the UAE, or improves cash flow, is a positive step."

COMPANY PROFILE
Name: Akeed

Based: Muscat

Launch year: 2018

Number of employees: 40

Sector: Online food delivery

Funding: Raised $3.2m since inception 

Citadel: Honey Bunny first episode

Directors: Raj & DK

Stars: Varun Dhawan, Samantha Ruth Prabhu, Kashvi Majmundar, Kay Kay Menon

Rating: 4/5

Who is Ramon Tribulietx?

Born in Spain, Tribulietx took sole charge of Auckland in 2010 and has gone on to lead the club to 14 trophies, including seven successive Oceania Champions League crowns. Has been tipped for the vacant New Zealand national team job following Anthony Hudson's resignation last month. Had previously been considered for the role. 

UAE rugby season

FIXTURES

West Asia Premiership

Dubai Hurricanes v Dubai Knights Eagles

Dubai Tigers v Bahrain

Jebel Ali Dragons v Abu Dhabi Harlequins

UAE Division 1

Dubai Sharks v Dubai Hurricanes II

Al Ain Amblers v Dubai Knights Eagles II

Dubai Tigers II v Abu Dhabi Saracens

Jebel Ali Dragons II v Abu Dhabi Harlequins II

Sharjah Wanderers v Dubai Exiles II

 

LAST SEASON

West Asia Premiership

Winners – Bahrain

Runners-up – Dubai Exiles

UAE Premiership

Winners – Abu Dhabi Harlequins

Runners-up – Jebel Ali Dragons

Dubai Rugby Sevens

Winners – Dubai Hurricanes

Runners-up – Abu Dhabi Harlequins

UAE Conference

Winners – Dubai Tigers

Runners-up – Al Ain Amblers

ELIO

Starring: Yonas Kibreab, Zoe Saldana, Brad Garrett

Directors: Madeline Sharafian, Domee Shi, Adrian Molina

Rating: 4/5

Skewed figures

In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458. 

GAC GS8 Specs

Engine: 2.0-litre 4cyl turbo

Power: 248hp at 5,200rpm

Torque: 400Nm at 1,750-4,000rpm

Transmission: 8-speed auto

Fuel consumption: 9.1L/100km

On sale: Now

Price: From Dh149,900

Francesco Totti's bio

Born September 27, 1976

Position Attacking midifelder

Clubs played for (1) - Roma

Total seasons 24

First season 1992/93

Last season 2016/17

Appearances 786

Goals 307

Titles (5) - Serie A 1; Italian Cup 2; Italian Supercup 2

The specs: 2018 Chevrolet Trailblazer

Price, base / as tested Dh99,000 / Dh132,000

Engine 3.6L V6

Transmission: Six-speed automatic

Power 275hp @ 6,000rpm

Torque 350Nm @ 3,700rpm

Fuel economy combined 12.2L / 100km

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Range: 400km

Power: 134bhp

Torque: 175Nm

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Available: Now

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Director Ashutosh Gowariker

Produced Ashutosh Gowariker, Rohit Shelatkar, Reliance Entertainment

Cast Arjun Kapoor, Sanjay Dutt, Kriti Sanon, Mohnish Behl, Padmini Kolhapure, Zeenat Aman

Rating 3 /stars

The specs

Engine: four-litre V6 and 3.5-litre V6 twin-turbo

Transmission: six-speed and 10-speed

Power: 271 and 409 horsepower

Torque: 385 and 650Nm

Price: from Dh229,900 to Dh355,000

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  • Discounts on sales price of off-plan units
  • Flexible payment plans from developers
  • Mortgages with better interest rates, faster approval times and reduced fees
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Company%20Profile
%3Cp%3E%3Cstrong%3EName%3A%3C%2Fstrong%3E%20Neo%20Mobility%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%20February%202023%3Cbr%3E%3Cstrong%3ECo-founders%3A%3C%2Fstrong%3E%20Abhishek%20Shah%20and%20Anish%20Garg%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%3Cbr%3E%3Cstrong%3EIndustry%3A%3C%2Fstrong%3E%20Logistics%3Cbr%3E%3Cstrong%3EFunding%3A%3C%2Fstrong%3E%20%2410%20million%3Cbr%3E%3Cstrong%3EInvestors%3A%3C%2Fstrong%3E%20Delta%20Corp%2C%20Pyse%20Sustainability%20Fund%2C%20angel%20investors%3C%2Fp%3E%0A
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Engine: Dual-motor all-wheel-drive electric

Range: Up to 610km

Power: 905hp

Torque: 985Nm

Price: From Dh439,000

Available: Now

Asia Cup 2018 Qualifier

Sunday's results:

  • UAE beat Malaysia by eight wickets
  • Nepal beat Singapore by four wickets
  • Oman v Hong Kong, no result

Tuesday fixtures:

  • Malaysia v Singapore
  • UAE v Oman
  • Nepal v Hong Kong
About Okadoc

Date started: Okadoc, 2018

Founder/CEO: Fodhil Benturquia

Based: Dubai, UAE

Sector: Healthcare

Size: (employees/revenue) 40 staff; undisclosed revenues recording “double-digit” monthly growth

Funding stage: Series B fundraising round to conclude in February

Investors: Undisclosed

What can victims do?

Always use only regulated platforms

Stop all transactions and communication on suspicion

Save all evidence (screenshots, chat logs, transaction IDs)

Report to local authorities

Warn others to prevent further harm

Courtesy: Crystal Intelligence

Captain Marvel

Director: Anna Boden, Ryan Fleck

Starring: Brie Larson, Samuel L Jackson, Jude Law,  Ben Mendelsohn

4/5 stars

The rules on fostering in the UAE

A foster couple or family must:

  • be Muslim, Emirati and be residing in the UAE
  • not be younger than 25 years old
  • not have been convicted of offences or crimes involving moral turpitude
  • be free of infectious diseases or psychological and mental disorders
  • have the ability to support its members and the foster child financially
  • undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
  • A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
The specs

Engine: 2.0-litre 4cyl turbo

Power: 261hp at 5,500rpm

Torque: 405Nm at 1,750-3,500rpm

Transmission: 9-speed auto

Fuel consumption: 6.9L/100km

On sale: Now

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