UAE | Immigration | Unemployment Insurance scheme

January 24, 2023

24 January 2023

Impact Medium

UAE | Unemployment Insurance scheme


The UAE government has announced a new requirement for employees in the private and government sectors to register with an unemployment insurance scheme starting from 1 January 2023, called the Involuntary Loss of Employment (ILOE). This scheme provides Emirati nationals as well as UAE residents financial support in case of redundancy or contract termination from the employer. The new legislation aims to ensure continued sustainable living for the unemployed and help the country retain a competitive knowledge economy while attracting the best international talent.

The Detail

The Involuntary Loss of Employment (ILOE) is an unemployment insurance scheme that provides UAE nationals and residents working in the federal and private sectors financial support should they be made redundant from their job, as a result of termination by their employer. The financial support will be valued and paid in exchange of a monthly insurance premium from the employee during their employment tenure.

The scope of the scheme applies to all workers in the private and federal sectors, however the following categories are exempted:

– Employees of companies incorporated in Freezones*;
– Investors, business owners who own and manage their business themselves;
– Domestic workers;
– Employees hired on a temporary basis;
– Juveniles under the age of 18;
– Retirees who receive a pension and have joined a new employer.

*Although Freezone based employees are not eligible (yet), and will not be able to apply (at the time of publication) the authorities are working on a wider rollout.

Under the ILOE scheme, the employee must fulfill the monthly insurance payments for at least 12 months in order to qualify for financial support for a period of no more than three months from the date of termination. The compensation will be calculated on 60% of the employee’s total monthly salary, and will be capped at AED 10,000 for employees earning less than AED 16,000 per month, and AED 20,000 for employees earning more than AED 16,000 per month. The insurance scheme and its benefits will cease from the date the employee secures new employment in the UAE or three months from the date of redundancy/termination. Employees who resign from their employment or those terminated for disciplinary reasons will not be eligible to benefit from the scheme.

What this means

Employees must sign up for the Involuntary Loss of Employment scheme (ILOE) starting from 1 January 2023. There are a number of selected insurance providers in the UAE to register under the scheme; it is recommended to use the official website The deadline to register under the scheme is 30 June 2023, and failing to register will result in a fine of AED 400 per employee. Employers are not obliged to enroll their employees in the insurance scheme or pay any contributions to the scheme. The ILOE is employee specific and the employee is primarily responsible for subscribing to the scheme, although employers are encouraged to emphasise the importance since it concerns an important development related to employees’ labour protection.

How we can help

We will continue to closely monitor and provide timely guidance on any new updates by the UAE immigration authorities, and highlight the impact of any changes that may impact your expatriate workforce.

Contact us

Should you have further questions on this update, please reach out to:

● Anir Chatterji – Partner, EMEA Immigration:
● Rekha Simpson – Director, Middle East Immigration:
● Dounia Fathi-Benbrahim – Senior Manager, Middle East Immigration:
● Ananth Prasad – Manager, Middle East Immigration:

Further information on Vialto Partners can be found on our website:

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