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Abu Dhabi, UAEMonday 1 March 2021

Firms face big fines for 'ghost emiratisation'

Companies that employ Emirati "ghost workers" as a way of circumventing a new incentive scheme will face fines of up to Dh20,000 per worker and then have to pay punitive charges for labour cards.

Abu Dhabi // Companies that employ Emirati "ghost workers" as a way of circumventing a new incentive scheme will face fines of up to Dh20,000 per worker and then have to pay punitive charges for labour cards.

New labour card rules, which were unveiled by the Ministry of Labour this week and are due to come into force next month, give incentives for firms that meet an Emiratisation target.

They offer half-price labour cards for companies with 20 per cent of workers in skilled jobs, if at least 15 per cent of those skilled jobs are occupied by Emiratis. These companies will pay just Dh300 for each foreign worker's labour card.

A senior ministry official described the incentive as a "shift to institutionalising Emiratisation, to setting it by default not just a choice".

Companies that miss the 15 per cent target will pay between Dh600 and Dh2,000 for labour cards, depending on the diversity of their workforce.

Those that draw more than half their staff from a single nationality will pay the highest rate, Dh2,000. A middle tier of Dh1,500 will cover companies that have more than a quarter of their staff of one nationality.

The Dh600 rate will apply to firms where no single nationality accounts for more than a quarter of the workforce.

But officials are wary that the top incentive tier could be abused, with companies putting Emiratis on the payroll but not requiring them to work. They admit that "ghost Emiratisation" is currently a problem.

To prevent it, companies found employing "ghost" Emiratis will be fined Dh20,000 per "ghost" employee and immediately downgraded to the lowest, "offender" category in the new labour card system. For at least six months, the cards will cost Dh5,000 for each expatriate.

In public, most companies say they are firmly behind Emiratisation efforts. However, a report prepared last year by the consultants Deloitte for the Tawteen Council, Abu Dhabi's Emiratisation agency, found the real position was less positive.

It found that Emiratis were poorly represented in the private sector, making up just four per cent of the workforce.

It noted that Emiratis were paid 40 per cent more than expatriates, while being perceived as 20 per cent less productive at junior levels. "For doing a similar job, Emiratis cost more," it stated.

Mohamed al Nuimi, the head of Emiratisation at Emirates Foundation, described the new scheme as crucial for the country's development. "Many Emiratis will be pleased with this," he said. "This will help build a strong future for them, a big part of the country's strategy."

While fiddling Emiratisation targets will put companies straight into the "offender" category, other malpractices will carry black points that will knock them down a level on the scale, increasing the cost of labour cards.

Each time a firm accumulates 100 points, it will drop a level until it reaches the "offender" group. Some offences will do that in one go; employing workers without visas or labour cards, human trafficking and falsifying salary details to meet new minimum wage requirements, will all carry 100 points.

Other offences, such as failing to give workers a midday break during the summer months, will carry a lower tariff as well as a fine.

The points will be cleared annually, or each time a company is knocked down a level. A downgraded company can be reassessed and upgraded after six months.

Under the new system, labour cards will need to be renewed every two years, instead of three years.

While the top and bottom categories are new, the three middle categories are similar to those currently in place, with the costs scaled down - from Dh1,000, Dh2,000, and Dh3,000 - to account for the shorter validity.

Companies will initially remain in their current grouping, with six months to meet the new rules.


Published: December 11, 2010 04:00 AM

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