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.

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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."

MATCH INFO

Cricket World Cup League Two
Oman, UAE, Namibia
Al Amerat, Muscat
 
Results
Oman beat UAE by five wickets
UAE beat Namibia by eight runs
Namibia beat Oman by 52 runs
UAE beat Namibia by eight wickets
UAE v Oman - abandoned
Oman v Namibia - abandoned

Pearls on a Branch: Oral Tales
​​​​​​​Najlaa Khoury, Archipelago Books

UAE currency: the story behind the money in your pockets
The National's picks

4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young

Three-day coronation

Royal purification

The entire coronation ceremony extends over three days from May 4-6, but Saturday is the one to watch. At the time of 10:09am the royal purification ceremony begins. Wearing a white robe, the king will enter a pavilion at the Grand Palace, where he will be doused in sacred water from five rivers and four ponds in Thailand. In the distant past water was collected from specific rivers in India, reflecting the influential blend of Hindu and Buddhist cosmology on the coronation. Hindu Brahmins and the country's most senior Buddhist monks will be present. Coronation practices can be traced back thousands of years to ancient India.

The crown

Not long after royal purification rites, the king proceeds to the Baisal Daksin Throne Hall where he receives sacred water from eight directions. Symbolically that means he has received legitimacy from all directions of the kingdom. He ascends the Bhadrapitha Throne, where in regal robes he sits under a Nine-Tiered Umbrella of State. Brahmins will hand the monarch the royal regalia, including a wooden sceptre inlaid with gold, a precious stone-encrusted sword believed to have been found in a lake in northern Cambodia, slippers, and a whisk made from yak's hair.

The Great Crown of Victory is the centrepiece. Tiered, gold and weighing 7.3 kilograms, it has a diamond from India at the top. Vajiralongkorn will personally place the crown on his own head and then issues his first royal command.

The audience

On Saturday afternoon, the newly-crowned king is set to grant a "grand audience" to members of the royal family, the privy council, the cabinet and senior officials. Two hours later the king will visit the Temple of the Emerald Buddha, the most sacred space in Thailand, which on normal days is thronged with tourists. He then symbolically moves into the Royal Residence.

The procession

The main element of Sunday's ceremonies, streets across Bangkok's historic heart have been blocked off in preparation for this moment. The king will sit on a royal palanquin carried by soldiers dressed in colourful traditional garb. A 21-gun salute will start the procession. Some 200,000 people are expected to line the seven-kilometre route around the city.

Meet the people

On the last day of the ceremony Rama X will appear on the balcony of Suddhaisavarya Prasad Hall in the Grand Palace at 4:30pm "to receive the good wishes of the people". An hour later, diplomats will be given an audience at the Grand Palace. This is the only time during the ceremony that representatives of foreign governments will greet the king.

Test

Director: S Sashikanth

Cast: Nayanthara, Siddharth, Meera Jasmine, R Madhavan

Star rating: 2/5

The specs
  • Engine: 3.9-litre twin-turbo V8
  • Power: 640hp
  • Torque: 760nm
  • On sale: 2026
  • Price: Not announced yet
Volvo ES90 Specs

Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)

Power: 333hp, 449hp, 680hp

Torque: 480Nm, 670Nm, 870Nm

On sale: Later in 2025 or early 2026, depending on region

Price: Exact regional pricing TBA

UAE currency: the story behind the money in your pockets
SPECS
%3Cp%3E%3Cstrong%3EEngine%3C%2Fstrong%3E%3A%202-litre%20direct%20injection%20turbo%20%0D%3Cbr%3E%3Cstrong%3ETransmission%3C%2Fstrong%3E%3A%207-speed%20automatic%20%0D%3Cbr%3E%3Cstrong%3EPower%3C%2Fstrong%3E%3A%20261hp%20%0D%3Cbr%3E%3Cstrong%3ETorque%3C%2Fstrong%3E%3A%20400Nm%20%0D%3Cbr%3E%3Cstrong%3EPrice%3C%2Fstrong%3E%3A%20From%20Dh134%2C999%26nbsp%3B%3C%2Fp%3E%0A
The five pillars of Islam

1. Fasting 

2. Prayer 

3. Hajj 

4. Shahada 

5. Zakat 

Other ways to buy used products in the UAE

UAE insurance firm Al Wathba National Insurance Company (AWNIC) last year launched an e-commerce website with a facility enabling users to buy car wrecks.

Bidders and potential buyers register on the online salvage car auction portal to view vehicles, review condition reports, or arrange physical surveys, and then start bidding for motors they plan to restore or harvest for parts.

Physical salvage car auctions are a common method for insurers around the world to move on heavily damaged vehicles, but AWNIC is one of the few UAE insurers to offer such services online.

For cars and less sizeable items such as bicycles and furniture, Dubizzle is arguably the best-known marketplace for pre-loved.

Founded in 2005, in recent years it has been joined by a plethora of Facebook community pages for shifting used goods, including Abu Dhabi Marketplace, Flea Market UAE and Arabian Ranches Souq Market while sites such as The Luxury Closet and Riot deal largely in second-hand fashion.

At the high-end of the pre-used spectrum, resellers such as Timepiece360.ae, WatchBox Middle East and Watches Market Dubai deal in authenticated second-hand luxury timepieces from brands such as Rolex, Hublot and Tag Heuer, with a warranty.

Bib%20Gourmand%20restaurants
%3Cp%3EAl%20Khayma%0D%3Cbr%3EBait%20Maryam%0D%3Cbr%3EBrasserie%20Boulud%0D%3Cbr%3EFi'lia%0D%3Cbr%3Efolly%0D%3Cbr%3EGoldfish%0D%3Cbr%3EIbn%20AlBahr%0D%3Cbr%3EIndya%20by%20Vineet%0D%3Cbr%3EKinoya%0D%3Cbr%3ENinive%0D%3Cbr%3EOrfali%20Bros%0D%3Cbr%3EReif%20Japanese%20Kushiyaki%0D%3Cbr%3EShabestan%0D%3Cbr%3ETeible%3C%2Fp%3E%0A
The specs

Engine: 3-litre twin-turbo V6

Power: 400hp

Torque: 475Nm

Transmission: 9-speed automatic

Price: From Dh215,900

On sale: Now

COMPANY PROFILE
Name: Kumulus Water
 
Started: 2021
 
Founders: Iheb Triki and Mohamed Ali Abid
 
Based: Tunisia 
 
Sector: Water technology 
 
Number of staff: 22 
 
Investment raised: $4 million