The United Arab Emirates today launched a low-cost insurance system with the aim of ensuring long-term employee protection and pump AED14bn (US$3.8bn) back into the system.
As of Monday, the UAE’s Ministry of Human Resources and Emiratisation (MOHRE) will start refunding bank guarantees of AED3,000 ($816) per worker to employers, and will be replacing it with a new insurance policy that costs just AED60 per worker.
The AED60 that will be paid to insure each worker per year the system will include a basic cover of AED20,000 per worker annually. This sum will include end-of-service benefits, vacation allowance, overtime, unpaid wages and certain cases of injury in the workplace.
Hisham Khalil, human resources manager at Team Engineering Enterprises in Dubai, told Zawya his company stands to receive more than AED4.3m.
“Such an amount can be used in investing in employees that are the company’s biggest gain. It will provide better healthcare, safety on our sites, and improved accommodation camps,” Khalil explained.
The central government in Abu Dhabi has argued that the bill, which was passed in June this year, will boost employees’ rights across the spectrum, and has been presented as a boon to the wider economy.