Private companies failing to meet Emiratisation deadline now face fines

A reminder of tough action with penalties of Dh100,000 to Dh500,000 levied on employers who falsify numbers

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Private sector companies who failed to meet Friday's deadline for Emiratisation targets will face mounting fines of up to Dh500,000.

The Ministry of Human Resources and Emiratisation reminded private companies of the deadline to comply with guidelines and to ensure 3 per cent of their workforce comprises Emiratis to avoid paying penalties.

“We call on companies with 50 employees or more to benefit from the grace period until July 7 to achieve their semi-annual 1 per cent Emiratisation targets,” the ministry tweeted.

“Starting from July 8, we will review companies' compliance with the required targets, and a fine of Dh42,000 will be imposed for each Emirati not employed.”

Companies who fabricate or mislead authorities regarding their Emiratisation numbers also face steep fines.

Mid-year targets

Businesses with at least 50 employees must ensure that Emiratis account for 3 per cent of their workforce before this weekend.

The mid-year Emiratisation target was extended from June 30 to July 7 due to the Eid Al Adha break.

The Emiratisation measures apply to skilled positions. While companies in free zones are exempt, they are encouraged to participate.

The government announced in February that companies must increase the proportion of Emirati workers by 1 per cent every six months.

Employers have been asked to meet a 4 per cent target by the end of this year, though this moves up to 6 per cent next year, 8 per cent in 2025 and 10 per cent by the end of 2026.

The number of Emiratis working in the private sector reached 66,000 in May, with more than 10,000 hired in the first three months of this year, as per government figures.

Hefty fines

In line with current regulations, employers who evade targets would be fined an administrative penalty of between Dh20,0000 to Dh100,000 per worker.

“This is for false Emiratisation – if an employer has filed invalid documents or information to receive salary support from the government,” said Haider Hussain, partner at Fragomen, a consultancy firm that supports organisations with immigration and Emiratisation regulations.

A fine of Dh20,000 is levied for taking no action when an Emirati employee does not report to work, despite being issued a work authorisation and after the employer has received salary support from the government.

The same penalty will be charged if the employee does not report to work regularly as per the employment contract or has abandoned work without the employer officially reporting this.

“In all cases, any salary support from the government will be suspended and the employer will be required to return the subsidies they have received,” Mr Hussain said.

“Additionally, the authorities may impose more than one sanction for multiple violations.”

Manipulating employee data

Employers face fines of between Dh100,000 to Dh500,000 if authorities find they have deliberately attempted to alter staff numbers to dodge Emiratisation targets, the ministry announced in May.

The government added this as a new item to the list of fines for evading Emiratisation regulations.

The penalties are for reducing the number of Emirati employees below their targets or modifying job titles to circumvent regulations.

Companies that repeatedly fail to comply will be hit by a rising range of fines, Mr Hussain said.

“As per the law, employers that change the professional classification of their workers – for instance from a skilled to an unskilled category – or purposely reduced the number of workers in their employment with the intention to circumvent the prescribed Emiratisation targets, will be subject to a fine of Dh100,000 for the initial violation, or Dh300,000 for a second violation, or Dh500,000 for a third violation or beyond,” he said.

Last month, a company was fined Dh100,000 for reducing the number of its employees to below 50 from 68.

The firm had cancelled work permits and later issued new ones through an associated company under the same employer.

Employers would be asked to meet the required nationalisation targets based on staff numbers prior to the breach.

Incentives offered

The Emirati Human Resources Competitiveness Council, or Nafis, was launched in 2021 to support UAE citizens moving to the private sector by increasing their competitiveness.

The council’s goal is to get 75,000 citizens into the private sector by 2025.

Incentives have been offered to companies that train citizens and initiatives have been launched such as the Industrialist Programme to encourage the private sector to hire Emiratis and develop their skills.

“It is important for private companies to understand the vision of the UAE and ensure compliance to avoid enforcement of penalties,” Mr Hussain said.

“UAE authorities have been encouraging Emiratisation in the private sector to support and educate companies on how to access local talent.

“They are taking measures to ensure companies stay on track with their target to have 10 per cent private sector represented by Emirati nationals by 2026.”

Updated: July 08, 2023, 4:04 AM