Latest figures show that 894 private companies have tried to evade Emiratisation rules since they came into force in 2022.
Officials made the announcement on Wednesday, saying that 1,267 fake Emiratisation cases have been discovered.
The Ministry of Human Resources and Emiratisation said those companies will no longer receive financial benefits from the Emirati Talent Competitiveness Council programme for employing UAE citizens.
Fake Emiratisation
False Emiratisation includes family members being hired with no real role, or forging employment records by obtaining false work permits in the name of UAE citizens.
The ministry says offending companies will be issued with fines ranging from Dh20,000 to Dh100,000 for each case.
Companies that break the rules are also downgraded to the lowest categories in the private sector classification system. This means they now face higher service fees for work permits and transfer fees. Instead of paying only Dh250 for certain permits, they will pay Dh3,750.
The UAE's Nafis programme was introduced in September 2021 with a mission to ensure 10 per cent of all jobs in the private sector were taken up by citizens by the end of 2026, – part of a major Emiratisation push.
More than 82,000 Emiratis are now employed outside the public sector – up 52,000 since the start of the campaign, Nafis said.
The latest figures represent a significant increase over the 50,228 citizens employed in the sector at the end of 2022.
Nafis said it had created 32,000 job opportunities for Emiratis since its inception.
Legal requirements
UAE authorities had previously warned private companies against posting misleading job adverts and offering unskilled positions and reduced salaries to citizens under the country's Emiratisation drive.
Employers at eligible companies are required to reach a 4 per cent target by the end of the year, increasing to 6 per cent by the close of 2024, 8 per cent the following year and 10 per cent by the end of 2026.
In July, small businesses were told they must recruit Emiratis to their workforce in a major expansion of the drive.
Companies with 20 to 49 employees must hire at least one UAE citizen by next year and another by 2025.
The requirement applies to privately owned companies in 14 sectors, including real estate, education, construction and health care.
Previously, only companies with 50 or more employees needed to meet the targets for hiring UAE citizens.
