UAE government insurance scheme pays out Dh289m to more than 32,000 workers

Programme was expanded in 2021 to cover a wider range of scenarios

The low-cost insurance scheme is a non-mandatory alternative for employers. Chris Whiteoak / The National

More than 32,000 private sector employees have received about Dh289 million in wages and gratuities owed to them over the past five years under a government insurance scheme.

The Workers Protection Programme (WPP) – established by the Ministry of Human Resources and Emiratisation (MOHRE) in 2018 – provides up to Dh20,000 worth of insurance cover in cases where employers refuse or are unable to pay up.

The average amount paid to employees benefiting from the initiative was more than Dh9,000, figures shared by the ministry's statistics division show.

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The authority's latest Labour Market Observatory report shows that 99 per cent of private sector workers are now protected by the programme.

How does the policy work?

The primary beneficiaries of the scheme are workers who have not been paid their due wages, end-of-service benefits or other entitlements.

The low-cost insurance scheme is a non-mandatory alternative to the Dh3,000 deposit that employers are required to put up for each worker when applying for a work permit.

Coverage and benefits

Employers signing up the scheme pay Dh55 a year or Dh137.5 for 30 months of cover for each skilled worker; Dh72 a year or Dh180 for 30 months of cover for each limited-skill worker; or Dh100 a year or Dh250 for 30 months of cover for each worker operating at a high-risk facility.

The insurance scheme was expanded in 2021 to cover a wider range of scenarios, benefiting both the employees and the employer. These include:

• Salaries up to a maximum of the last 120 days prior to the last working day
• Gratuity payments
• Worker’s return costs
• Repatriation of mortal remains, in case of death
• Costs of work-related injuries and diseases
• Flight tickets for absconded workers if absconding was duly reported and worker was arrested during coverage period
• Any legally stipulated dues including and not limited to leave allowance, warning allowance, arbitrary dismissal allowance or contract breach allowance

The insurance pool pays out claims based on orders issued by the Labour Execution Department in cases where the employer is unable to pay. Employers are still liable to reimburse the insurance pool after claims are paid out.

WPP includes products for domestic workers and recruitment agencies that hire domestic workers for households. Domestic worker insurance starts at Dh40 a year per employee and Dh100 for 30 months.

Building a safety net

The programme is separate from the more recent involuntary loss of employment (ILOE) insurance scheme that protects employees in case of job loss due to reasons other than disciplinary action or resignation. Under the ILOE scheme, which is paid for by employees, 17,758 people have benefited.

All employees in the private and public sector are required to sign up for the ILOE policy. It is the responsibility of the staff member to enrol in the initiative and renew the policy before it expires.

Employees can sign up to one of two categories: category A (basic monthly salary of Dh16,000 or lower); or category B (basic monthly salary of more than Dh16,000). It costs Dh5 a month for category A and Dh10 for category B. The premiums are subject to 5 per cent VAT.

The scheme provides people who lose their jobs with 60 per cent of their basic salary for up to three months, or until they find a new job, whichever is sooner. The monthly compensation paid cannot exceed Dh10,000 for claimants in category A or Dh20,000 for category B.