In UAE, the Ministry of Human Resources and Emiratisation (MHRE) issued the introduction of the new UAE Federal Labour Law in relation to Emiratisation in the UAE.
What is Emiratisation law?
Emiratisation law is the rule implemented on UAE-based private sector companies to raise the participation of UAE nationals in the workforce. These laws, specifically Ministerial Decision No. 279 of 2022, will definitely impact the organisational policies and recruitment strategies of businesses.
Changes to the Emiratisation Laws
There are some changes in the legislation in according to the UAE government regulations that are coming into force which includes :
- Ministerial Decision No, 279 of 2022 – Emiratisation in the private sector (2% emiratisation Law)
- Cabinet Decision No. 18 of 2022 (Classification Law)
- New rules governing benefits under the NAFIS scheme
NAFIS scheme benefits
Since Emiratisation law is a part of the NAFIS program, any registered employer who supports the program will be eligible for:
• a reduction of employer pension contribution for UAE nationals, and
• salary contribution of up to AED 8,000 for each UAE national employed under the NAFIS scheme.
New Emiratisation requirements
The new Emiratisation requirements apply to all employers who fall under the jurisdiction of the Ministry of Human Resources and Emiratisation(MOHRE).
Private sector companies with 50 or more employees are required to have at least 2% of a company’s workforce are to be Emirati. This programme will be put in effect across the UAE mainland, with the exclusion of certain free zones (like DIFC & ADGM). The actual number of Emiratis required will be calculated according to the overall number of skilled workers in the company.
An illustration of the requirement is as follows:
| 50 skilled workers | minimum 1 Emirati employee |
| From 51 to 100 skilled workers | minimum 2 Emirati employees |
| From 101 to 150 skilled workers | minimum 3 Emirati employees |
| 151 workers or above | 1 Emirati employee for every 50 or less workers |
Skilled workers criteria
Skilled workers, according to MoHRE, are workers who:
- Belong to any of these 5 worker categories:-
- Legislators, managers, business executives
- Professionals in scientific, technical & humanitarian fields
- Technicians in scientific, technical and humanitarian fields
- Writing professionals
- Service & sales occupations
- Having secondary school certificate, its equal or higher
- Having certificates attested by relevant authorities
- Having monthly salary of no less than AED 4,000
Penalties for non-compliance
The new Emiratisation requirements stipulate penalties for non-compliance. Each employer who fail to fulfil the Emiratisation requirements will have to pay the following penalties:
- A minimum fine of AED 6,000 per month per Emirati employee falling short of the quota. There will be an AED 1,000 increase per month per year if it continues to be the case.
- If the company fails to pay the fines, its work permit applications may be suspended.
- In case a company fails to fulfil requirements for two consecutive years, it can lead to the demotion of their company to the third category under the classification law.
Classification of companies
The Ministry of Human Resources and Emiratisation (MoHRE) classifies companies into three categories. The categories are:
Category 1
Companies are required to achieve at least one of the following objectives to fall under this category:
- increase their annual Emiratisation quotas at least three times above the target
- hire and train at least 500 UAE nationals annually
- being a small/medium company owned by a young UAE national, or
- being a qualifying training and employment centre.
As a reward, The MoHRE will set work permit fees at a maximum of AED 250 for two years. Employees from the UAE and the GCC will not be charged these fees.
Category 2
Companies that do not achieve the objectives required for category 1 yet still meet the Emiratisation quota will fall under category 2.
The MoHRE will set work permit fees for this category at AED 1,200 for two years. Employees from the UAE and the GCC will not be charged these fees.
Category 3
Companies that fail to comply with the Emiratisation quota.
The penalties mentioned above will be imposed on the companies under this category.
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