What Employers Need to Know About ILOE Insurance in UAE?

The UAE is always improving its workplace environment. A huge part of this is the new mandatory unemployment insurance scheme. As of January 2025, official figures showed that over 9 million workers had already subscribed. This is not just a benefit; it is a legal requirement. 

As a business owner, you need to understand the ILOE insurance in UAE. It provides a temporary income for your employees if they lose their jobs for reasons outside their control. This guide will explain what it is, who needs it, and what your responsibilities are as an employer.

Why ILOE Insurance is a Good Thing?

This new system is a positive step for the entire business community. A secure workforce is a stable workforce. Here is why the ILOE insurance in UAE benefits everyone.

• Creates a sense of stability in the job for employees across the nation.
• Ensures your company aligns with the latest labor laws from the UAE government.
• Makes the UAE an attractive destination for the best global talent.
• Provides a safety net to lower the financial strain on individuals and the economy.

This insurance helps your team appreciate that they work for a company that operates in a fair and supportive system.

Who Needs to Be Covered?

The rules for the ILOE insurance in UAE are very clear. It applies to most of the workforce, but there are some important exceptions you should know about.

• Private Sector Employees: It is applicable to all employees working for private companies, whether on the mainland or in a free zone.
• Federal Government Employees: All employees working for federal government entities must also subscribe to the scheme.
• Who is Exempt: The scheme does not apply to business investors who own their company, domestic workers, temporary contract workers, or anyone under 18.
• Employee’s Duty: It is the employee’s personal responsibility to subscribe and pay. Your role as the employer is to ensure they are aware and compliant.

Your Role as an Employer

Your main responsibility regarding ILOE insurance in UAE is to ensure your employees are signed up. You do not pay the premium for them. That is their job. However, you must create an environment of compliance. A recent global PwC survey found that financially stressed employees are far less productive at work. This insurance plan helps reduce that stress.

A stable team is a productive team. By encouraging your staff to subscribe to the ILOE insurance in UAE, you are helping build a more secure life for them. This, in turn, helps build a stronger and more focused team for you. It is a key part of your duty of care after completing your business setup in Dubai freezone or mainland.

How Your Employees Can Subscribe?

The process for your employees to subscribe to the ILOE insurance in UAE is simple and can be done online. You can guide your team to the right channels.

1. Visit the Official Portal: Employees can use the official ILOE insurance website, a mobile app, or designated kiosk machines.
2. Enter Their Details: They will need their Emirates ID and mobile number to log in and verify their identity.
3. Choose a Provider: They can then select an authorized insurance provider from the list on the portal.
4. Make the Payment: They can choose to pay the premium monthly, quarterly, or annually. Arnifi can help you with your overall company compliance, including understanding these requirements.

The Costs for Your Employees

The cost of the ILOE insurance in UAE is very low and is based on the employee’s basic salary. This makes it affordable for everyone on your team.

• Category One: For employees with a basic salary of AED 16,000 or less per month. The premium is AED 5 per month.
• Category Two: For employees with a basic salary of over AED 16,000 per month. The premium is AED 10 per month.

Employees can pay this small amount easily through various channels, including exchanges and online payments. It is a small price for a big safety net.

How an Employee Can Claim the Benefit?

So, what happens if a former employee needs to use this safety net? The process is clear, but they need to meet certain conditions to be eligible for the payout from their ILOE insurance in UAE.

• They must have been subscribed to the insurance plan for at least 12 consecutive months.
• The reason for losing their job must be involuntary. It does not cover resignations or dismissals for disciplinary reasons.
• The claim must be submitted within 30 days from the date they lost their employment.
• They cannot have started a new job or left the country during the compensation period.

This process is part of the broader legal framework that includes everything from your initial company registration in Dubai to employee relations.

Frequently Asked Questions (FAQs)

Conclusion

The ILOE insurance in UAE is now a component of the country’s labor law. As an employer, it’s your job to make sure that your team is following the rules. The measure enhances the UAE’s status as a leading global talent destination by ensuring an important protection for its labor force. By doing this you are contributing towards a more sustainable and robust environment for the business as a whole.

Need help understanding your compliance duties as a new business in the UAE? Talk to Arnifi. We will guide you through all the requirements to make sure your company is set up for success from day one.