A few years ago the government decided to implement some regulations to increase the Emiratisation law in the workforce in the UAE. The purpose of these new policies is to increase the participation of citizens in this country in jobs in the private sector. The United Arab Emirates has implemented new laws in order to meet this goal. For instance, private sector companies must hire a minimum of 2% Emirati employees per year.
In this article, we will show you everything you need to know about Emiratisation in the private sector. It is important that every business owner with detail about this new regulation. Thus, you can carry out your commercial activities with complete peace of mind. Therefore, we are going to teach you what the concept of UAE Emiratisation is. In addition, we are going to show you which are the regulations that must be complied with and many other things.
1. Do you know what is Emiratisation UAE?
Emiratization is known as an initiative that the government of the UAE has had. In this way, it seeks to employ its citizens in an efficient and meaningful way in both the public and private sectors. Although the program has been in force for a long time, the results can be observed in the public sector.
On the other hand, the private sector has lagged and citizens represent only 0.34% of the private sector workforce. In addition, there is a general agreement on the importance of Emiratization due to political, social, and economic reasons. However, there is some controversy regarding the impact of localization on organizational efficiency.
This is important for those people who want to know how to register their company and do not know about Emiratisation. In this way, you find that certain investigations warn that localization is not beneficial for companies that operate in the region. For this reason, it is important to know that they will depend on a series of contingent factors.
An example of these factors might be business activity and what type of trade license you need. There are multiple initiatives on the part of the government that try to actively promote Emiratization by training anyone. Among them are those who dropped out of high school until they graduated from it.
2. What are the regulations that must be followed when you want to hire employees because of the Emirates?
In this section, you will see some of the policies implemented by the Ministry of Human Resources and Emiratization (MoHRE). This is to guarantee correct compliance with the Emirates program; and in turn, avoid some fraudulent practices.
2.1 Rules Regarding the Advertising of Emiratisation Job Ads
All entrepreneurs should know that it is challenging to start a business in the UAE. However, if the regulations are followed, everything becomes easier. If a business owner needs to hire employees and decides to post Emiratisation job ads; there are some things you cannot do.
In particular, three rules must be met. The first is that you cannot publish jobs that are not graded. Thus, just as misleading advertisements cannot be communicated, that is, they do not represent genuine jobs and are available to the applicant. The second is that to mention the government’s Emiratization policies and benefits, you need to have permission from the MoHRE.
Finally, it is prohibited to provide information about the incentives that the government offers. Nor can mention being made of the support programs offered at the national level in the private sector.
2.2 Obligations of Employers when Hiring Emiratisation
Thanks to the impact generated by the new rules for company formation, changes were added to the Emiratisation law. When hiring Emiratis, all employers must provide a workplace and the right tools. In addition, a minimum training of the functions of the position in which they are going to perform.
Other obligations must be fulfilled, such as applying for a work permit for Emiratis from the MoHRE. In addition, they must be provided with a labor contract and paid an adequate salary, following the system of protection of Salaries. The citizen is also registered in the pension and social security system. Contributions will begin after completing one month from the date of issuance of the work permit. With this, they are guaranteed that they can have a retreat in Dubai or another emirate.
On the other hand, there is a prohibition for employers and they must comply. This is to deduct the salaries of Emirati citizens. Placing as an excuse to benefit from the government support program. In other words, Emiratis cannot be paid lower salaries compared to their counterparts in the same job positions.
2.3 Obligations of Employees when Hiring Emiratisation in the private sector
Thus, just as employers have obligations to Emirati employees who join the private sector, they also have some to fulfill. Among the main ones is compliance with the obligations established in the Decree Law on the Regulation of Labor Relations and its Implementation Regulation. Thus, additional resolutions were issued for its execution and compliance.
In addition, the relative decisions included in the NAFIS program and the obligations established in the employment contract must be respected and complied with. On the other hand, citizens must inform the MoHRE about the violations that are carried out in the Emiratization resolutions.
3. Do you know what is NAFIS?
You can find that NAFIS is part of the projects of the 50 of the UAE. Where it has been incorporated into the emirate as one of the key parts of the initiative. In this way, NAFIS is founded as a federal government program; which aims to build a new generation of citizens who are talented Emiratis.
Thanks to this, it seeks to increase the competitiveness of Emirati human resources and to empower them so that they can occupy jobs throughout the private sector. The goal of NAFIS is to help Emirati citizens to pursue their professional careers in the private sector.
In addition, various initiatives were announced as part of this scheme. You can find professional advice, the Emirati salary support scheme, support for the apprenticeship program, and merit programs. In this way, they will also be able to know a lot about the benefits of starting a business with Emiratisation in mind.
3.1 Emirates Law Requirements
Those employers that have more than 50 employees; must increase their Emiratisation rate annually by 2% of the total number of skilled workers. In the UAE, because they are known as the best center for doing business, there are many foreign companies. However, they should be aware of this as non-compliance can result in fines.
From January 2023, and as agreed with the Emiratization law requirement of 2%; All companies that are from the private sector will have to follow the scheme below:
- If you have 50 skilled workers, the minimum goal is that you hire one UAE national employee.
- If you have 51 to 100 skilled workers, the goal is to hire a minimum of two UAE national employees.
- In case you have 101 to 150 skilled workers, the goal is to hire at least three UAE national employees.
- If you have more than 151 workers, you must hire one UAE national employee for every 50 workers you have in the company.
4. What are the changes that were implemented to the laws of the Emiratisation program?
According to the regulations that the UAE government has shared. In addition, all the changes in the legislation which they are coming into force can be seen below:
- The ministerial agreement No. 279 of 2022-Emiratisation in the private sector. The law of 2% of emirates.
- Cabinet agreement No. 18 of 2022. The classification law.
- All the new rules that govern the NAFIS scheme are mentioned in the previous part of the article.
4.1 The impact of Emiratisation on companies in the UAE
All companies that are under the jurisdiction of MOHRE, must compulsorily follow the new emirate laws. In this way, according to the aforementioned, at least 2% of its workforce must be Emirati if the company is private. All this is as long as you have at least 50 staff members on your payroll.
It is important to know that this program will enter into force throughout the continental territory of the UAE. However, there is an exclusion in certain free zones. For this reason, it is important to know about the free zones in the UAE.
4.2 Who are the qualified workers according to the Emiratisation law in the UAE?
The rules of Emiratization are as mentioned above. However, MOHRE defines who are skilled workers. They must meet the following requirements.
They must belong to one of the following categories of workers:
- Managers, legislators, and company executives.
- Professionals in the scientific, humanitarian, and technical fields.
- Technicians in scientific, humanitarian, and technical fields.
- That they be writing professionals.
- In sales and service occupations.
- They must have a high school certificate, whether it is an equal or a higher one.
- A worker certificate that is certified by the competent authority.
- You must have a monthly salary of not less than AED 4,000.
5. What fines or sanctions must be paid by the company that does not comply with this law?
If the companies do not comply with the Emiratisation law, they may face some penalties or fines. A recommendation to avoid these inconveniences is to hire companies that offer PRO services. In this section, the penalties that have to be paid by companies that violate the Emiratisation requirement are mentioned.
In case you do not comply with this regulation, the employer must pay a minimum fine of AED 6,000 for each month and for each vacant job position that an Emirati should fill. If you do not comply with this sanction, it may cause a temporary suspension of work applications made by the company.
If the company does not comply with the payment of these quotas for a period of two consecutive years; the company will be demoted to the third category according to the Classification law.
Currently, the government in the UAE has announced that they are working to prosecute companies that do not comply with this law. Even the entities themselves may suffer financial implications or have a bad reputation, for showing complacency in this scenario.
6. Contact Connect Middle East to have access to the best PRO services and successfully comply with the Emiratization law
All companies must go through a contracting process and for this, they must know the existing regulations. For instance, in the UAE the Emiratization program. To avoid paying any sanction or penalty for violating any law, it is best to hire a company that offers PRO services.
In Dubai, the best one you can find is Connect Middle East, which also helps you with the company opening procedures. To contact us you can use two communication channels, the first is by email at email@example.com and the second is to call us at +971 43 316 688.