New Worker's Insurance Scheme Forthcoming

Dubai, UAE, 4 October 2018:   The Ministry of Human Resources and Emiratisation announced that effective 14 October, a worker’s insurance scheme will replace the existing bank guarantees system.   

The Ministry of Human Resources and Emiratisation announced that effective 14 October, a worker’s insurance scheme will replace the existing bank guarantees system. The new insurance scheme will apply to all private-sector employees, including domestic workers. 

Details of the insurance scheme 

Instead of a fixed amount of AED 3,000 that typically must be paid against every work permit application, employers will pay an insurance premium of AED 120 per person, for a two-year work permit. This will provide an insurance coverage of up to AED 20,000 in lieu of unpaid wages, return ticket and against work-related injuries, among other benefits. 

Bank guarantee recovery 

Employers will be able to recover earlier deposited bank guarantees only upon the cancellation or renewal of a work permit, and after the payment of an insurance premium. They must be free from any wages-related violations for at least six months before the renewal date of the work permit. 

How Fragomen can assist? 

Fragomen will continue monitoring the situation and will revert with additional information as developments occur.