Companies face Dh100,000 fines for forging hiring documents to hit a new quota for Emiratis working in the private sector.
The Ministry of Human Resources issued the warning ahead of an end-of-year deadline.
By January 1, 2023, companies with more than 50 employees must ensure 2 per cent of their staff are Emirati. Any employer that fails to reach the target must pay Dh6,000 a month for every position short of the quota.
The policy applies to domestic companies registered with ministry — and does not apply to freezone businesses.
In a statement on Tuesday, officials suggested the move raised the prospect of some employers trying to get around the requirement.
They warned that a minimum fine of Dh20,000 and a maximum of Dh100,000 may be levied for each false hiring. In such cases, all the benefits given to the company would be stopped and any benefits already distributed would have to be returned.
The UAE wants 10 per cent of the private sector workforce to be made up of citizens by 2026. That would create about 75,000 jobs for Emiratis in the private sector.
To help to hit this target, the government is running a scheme called Nafis.
It includes salary top-ups for Emiratis, who have traditionally earned more in the public sector, and has a job portal full of UAE nationals' CVs.
A full guide to that can be found here.
Forging hiring data
A Dh20,000 administrative fine for each candidate may be applicable, if:
- The company does not hire an Emirati after issuing a work permit but continues to get support from Nafis
- Employees benefitting from the programme show non-commitment towards work and the employer fails to notify Nafis
- Employees benefitting from the programme do not come to work and the employer fails to inform authorities
- The company changes any benefit of the employee without a valid reason and fails to inform Nafis
- The company does not employ the Emirati after they finished the Nafis training without giving a valid reason
The ministry called on companies to support the country's push to invest in local talent, and benefit from incentives and fines for non-compliance will be collected from January.
In May, the UAE said it would cut some worker permit fees for private sector companies that voluntarily exceed Emiratisation targets.
This means that companies that go above and beyond what is legally required will pay only Dh250 for certain permits rather than Dh3,750.
Four reasons global stock markets are falling right now
There are many factors worrying investors right now and triggering a rush out of stock markets. Here are four of the biggest:
1. Rising US interest rates
The US Federal Reserve has increased interest rates three times this year in a bid to prevent its buoyant economy from overheating. They now stand at between 2 and 2.25 per cent and markets are pencilling in three more rises next year.
Kim Catechis, manager of the Legg Mason Martin Currie Global Emerging Markets Fund, says US inflation is rising and the Fed will continue to raise rates in 2019. “With inflationary pressures growing, an increasing number of corporates are guiding profitability expectations downwards for 2018 and 2019, citing the negative impact of rising costs.”
At the same time as rates are rising, central bankers in the US and Europe have been ending quantitative easing, bringing the era of cheap money to an end.
2. Stronger dollar
High US rates have driven up the value of the dollar and bond yields, and this is putting pressure on emerging market countries that took advantage of low interest rates to run up trillions in dollar-denominated debt. They have also suffered capital outflows as international investors have switched to the US, driving markets lower. Omar Negyal, portfolio manager of the JP Morgan Global Emerging Markets Income Trust, says this looks like a buying opportunity. “Despite short-term volatility we remain positive about long-term prospects and profitability for emerging markets.”
3. Global trade war
Ritu Vohora, investment director at fund manager M&G, says markets fear that US President Donald Trump’s spat with China will escalate into a full-blown global trade war, with both sides suffering. “The US economy is robust enough to absorb higher input costs now, but this may not be the case as tariffs escalate. However, with a host of factors hitting investor sentiment, this is becoming a stock picker’s market.”
4. Eurozone uncertainty
Europe faces two challenges right now in the shape of Brexit and the new populist government in eurozone member Italy.
Chris Beauchamp, chief market analyst at IG, which has offices in Dubai, says the stand-off between between Rome and Brussels threatens to become much more serious. "As with Brexit, neither side appears willing to step back from the edge, threatening more trouble down the line.”
The European economy may also be slowing, Mr Beauchamp warns. “A four-year low in eurozone manufacturing confidence highlights the fact that producers see a bumpy road ahead, with US-EU trade talks remaining a major question-mark for exporters.”
