ILOE – Involuntary Loss of Employment Dubai Insurance is now Mandatory!

What is ILOE?

With the introduction of Federal Decree Law No. 13 of 2022 about the Involuntary Loss of Employment (ILOE), this special scheme offers security to workers who were let go for reasons other than resignation or disciplinary action until they secure employment elsewhere.

Up to 60% of their average basic salary for the six months preceding to their termination of employment will be paid out as a monthly cash benefit to the qualified employees. Only employees who pay the monthly premium for a minimum of 12 consecutive months will be eligible for a maximum of three consecutive months of cash benefit for a claim.

Key Facts

• The UAE has introduced a new mandatory insurance scheme called ILOE (Involuntary Loss of Employment) to provide financial security to employees who lose their jobs.
• The scheme is mandatory for employees in the private sector and the federal government, while employees in free zones and semi-government and local government bodies have the option to register.
• More than 65 million employees have already registered for the UAE’s unemployment insurance system.
• The ILOE insurance scheme is divided into two categories based on the employee’s basic salary, with different insurance premiums and compensation amounts.
• Employees can claim insurance compensation if they have been subscribed to the scheme for at least 12 consecutive months.

Introduction

Dubai, one of the leading business and employment hubs in the world, has recently introduced a new mandatory insurance scheme called ILOE (Involuntary Loss of Employment). This scheme aims to provide financial security to employees who experience job loss. With the constantly evolving job market and economic uncertainties, this insurance scheme ensures that individuals have a safety net in place to support themselves and their families during difficult times.

The ILOE insurance scheme has been introduced by the UAE’s Ministry of Human Resources and Emiratisation. It is designed to cover employees in both the private sector and the federal government. While the scheme is mandatory for these sectors, employees in free zones and semi-government and local government bodies have the option to register. This new insurance program has already gained significant traction, with over 6.5 million employees having registered since its inception.

Understanding ILOE: Dubai’s New Mandatory Insurance Scheme

The ILOE insurance scheme, also known as the mandatory unemployment insurance scheme, is a crucial step taken by the UAE government to protect the rights and financial well-being of employees. It is a reflection of the government’s commitment to ensuring the welfare of workers and the stability of the labor market in Dubai. This mandatory insurance scheme aims to provide employees with a safety net in case of involuntary loss of employment, offering them financial support during the transition period between jobs.

The Basics of ILOE in Dubai

The ILOE insurance scheme operates on the basis of providing financial coverage to employees in Dubai who experience involuntary loss of employment. To participate in this scheme, employees are required to pay a monthly insurance premium. The premium amount depends on the employee’s basic salary and is divided into two categories. Employees earning AED 16,000 or less per month fall under Category A and are required to pay a premium of AED 5 per month (AED 60 annually). Those earning a monthly salary of more than AED 16,000 fall under Category B and are required to pay a premium of AED 10 per month (AED 120 annually).

Employees can register for the ILOE insurance scheme through the ILOE portal, which is a dedicated online platform for the registration and management of insurance policies. This portal allows employees to easily enroll in the scheme, provide the necessary information, and make the required premium payments.

Why the Shift to Mandatory Insurance?

The shift towards making the ILOE insurance scheme mandatory for employees in Dubai is driven by the UAE government’s commitment to providing comprehensive social protection to its workforce. By making unemployment insurance mandatory, the government aims to ensure the financial stability and well-being of employees during periods of job loss. This move reflects the government’s proactive approach in mitigating the impact of economic uncertainties and supporting individuals in their search for new employment opportunities.

The mandatory nature of the insurance scheme extends to employees in the private sector and the federal government. This inclusion ensures that a large portion of the workforce is covered under the insurance scheme, providing them with a safety net and reducing the financial burden associated with unemployment.

How ILOE Works for Employees and Employers in Dubai

The implementation of the ILOE insurance scheme in Dubai has implications for both employees and employers in the city. The responsibility of enrolling in the scheme lies with the individual employees, who are required to register and pay the insurance premium. However, employers also have the option to register their employees in the system, providing them with a hassle-free approach to compliance.

The Ministry of Human Resources and Emiratisation, responsible for overseeing the ILOE insurance scheme, ensures that employers and employees are aware of their roles and responsibilities. This includes providing guidance and support to employers in facilitating the registration process and promoting awareness among employees about the benefits and importance of the insurance scheme.

Coverage and Benefits of ILOE

The ILOE insurance scheme in Dubai provides employees with comprehensive coverage and various benefits in case of job loss. The insurance benefits are determined based on the employee’s basic salary, which is divided into two categories: Category A and Category B.

Category A includes employees with a basic salary of AED 16,000 or less per month. They are eligible for a monthly compensation of up to AED 10,000 for a maximum period of three consecutive months per claim. Category B includes employees with a basic salary exceeding AED 16,000 per month. They are eligible for a monthly compensation of up to AED 20,000 for the same duration.

The insurance pool created by the ILOE scheme ensures that employees have access to financial support during the transition period between jobs. This coverage provides them with a sense of security and stability, allowing them to meet their financial obligations and maintain their standard of living while searching for new employment opportunities.

Process of Enrolling in ILOE

Enrolling in the ILOE insurance scheme in Dubai is a straightforward process, facilitated through the dedicated online portal. Here are the steps involved in registering for the scheme:

• Visit the ILOE portal (www.iloe.ae) or download the ILOE mobile app.
• Provide the required information, including personal details, employment information, and contact information.
• Upload the necessary documents, such as a copy of the Emirates ID and any other supporting documents.
• Pay the insurance premium based on the employee’s category and salary.
• Complete the registration process and receive the insurance certificate.

To enroll in the ILOE insurance scheme, employees need to provide the following documents and information:

• Emirates ID number
• Mobile number
• Employment details, including company name and address
• Salary information and employment contract details

It is important to note that employees should ensure that their work permit has been canceled by their previous employer before filing a claim under the ILOE insurance scheme.

Key Benefits of ILOE for Dubai Residents

The ILOE insurance scheme in Dubai offers several key benefits to residents. By providing financial security during periods of unemployment, the scheme ensures that individuals and their families can maintain a certain level of financial stability. Some of the key benefits of the ILOE insurance scheme include:

• Monthly compensation: Employees who qualify for the scheme can receive monthly compensation based on their category and salary.
• Insurance coverage: The scheme provides coverage for a maximum period of three consecutive months per claim.
• Financial support: The compensation received through the scheme helps individuals meet their financial obligations and maintain their standard of living until they find new employment.

Simplified Claim Process

The claim process under the ILOE insurance scheme in Dubai has been designed to be simple and streamlined. Employees who meet the necessary criteria can file a claim for unemployment benefits through the ILOE portal. Here are some key aspects of the claim process:

• Filing a claim: Employees need to submit their claim within 30 days of the date of unemployment. This can be done through the ILOE portal by providing the necessary information and supporting documents.
• Processing period: Once the claim is submitted, it will be processed within two weeks. The processing period ensures that employees receive timely assistance and support during their unemployment.
• Certificate of insurance: Upon approval of the claim, employees will receive a certificate of insurance confirming their eligibility for the unemployment benefits.

Compliance and Penalties

Compliance with the ILOE insurance scheme in Dubai is mandatory for employees in the private sector and the federal government. Failure to comply with the legal requirements of the scheme can result in penalties and fines. Here are some key aspects of compliance and penalties:

• Legal requirements: Employees in the private sector and the federal government are required to register for the ILOE insurance scheme.
• Penalties for non-compliance: Employees who fail to register or maintain their insurance payments may face penalties, including fines and restrictions on obtaining new work permits.
• Fine of AED: A fine of AED 400 will be applied to those eligible for the ILOE scheme who have not subscribed. This fine serves as an incentive for employees to comply with the registration requirements and maintain their insurance coverage.

Understanding the Legal Requirements

The legal requirements for the ILOE insurance scheme in Dubai are outlined in the Federal Decree Law No (13) of 2022. Employees in the private sector and the federal government are mandated to register for the scheme. Here are some key aspects of the legal requirements:

• Employment contract: The ILOE insurance scheme applies to employees who have an employment contract with an employer in Dubai.
• Federal decree law: The legal framework for the scheme is established through the Federal Decree Law, which ensures that employees are protected and provided with financial assistance during job loss.
• Compliance: Employers are responsible for ensuring that their employees are aware of and comply with the legal requirements of the ILOE insurance scheme.

Steps to Register for ILOE

Registering for the ILOE insurance scheme in Dubai is a simple process that can be done through the dedicated ILOE portal or the mobile app. Here are the steps involved in registering for the scheme:

• Visit the ILOE portal (www.iloe.ae) or download the ILOE mobile app.
• Create an account by providing the required information, such as personal details and employment information.
• Complete the registration process by uploading the necessary documents, such as a copy of the Emirates ID.
• Make the required premium payments based on your category and salary.
• Receive the insurance certificate confirming your enrollment in the ILOE insurance scheme.

Online Registration Process

The online registration process for the ILOE insurance scheme in Dubai is designed to be user-friendly and convenient for employees. Here are the steps involved in the online registration process:

• Visit the ILOE portal (www.iloe.ae) or download the ILOE mobile app from the app store.
• Create an account by providing the necessary information, such as personal details and employment information.
• Verify your mobile number through an OTP (One-Time Password) sent to your registered mobile number.
• Complete the registration process by providing additional details, such as your Emirates ID number and employment contract information.
• Make the required premium payments based on your category and salary.
• Receive the insurance certificate confirming your enrollment in the ILOE insurance scheme.

Required Documents and Information

To register for the ILOE insurance scheme in Dubai, employees need to provide specific documents and information. Here are the required documents and information:

• Emirates ID number: Employees must provide their Emirates ID number during the registration process. This unique identifier is used to verify their identity and ensure accurate information.
• Mobile number: Employees need to provide a valid mobile number that will be used for communication and verification purposes.
• Employment details: Employees are required to provide information about their employment, such as their company name and address, to verify their eligibility for the scheme.
• Salary information: Employees need to provide their salary details, including their basic salary, to determine their category and premium amount.

Conclusion

In conclusion, understanding the mandatory ILOE scheme in Dubai is crucial for residents and employers alike. This insurance scheme offers financial security during unemployment and streamlines the claim process. Compliance is essential to avoid penalties, making it imperative to grasp the legal requirements. By comparing ILOE with other global insurances, Dubai’s unique features stand out. Registering for ILOE involves an online process and providing necessary information. Familiarizing yourself with eligibility criteria, costs, claim procedures, expat benefits, and exemptions ensures a smooth experience with ILOE in Dubai. Stay informed to make the most of this mandatory insurance scheme.

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Frequently Asked Questions (FAQ)

Who is Eligible for ILOE in Dubai?

Employees in Dubai who experience involuntary loss of employment are eligible for the ILOE insurance scheme. This includes employees in both the private sector and the public sectors, such as the federal government and local government bodies. The scheme provides financial support to individuals during periods of job loss, helping them maintain financial stability and meet their financial obligations.

How Much Does ILOE Cost?

The cost of the ILOE insurance scheme in Dubai depends on the employee’s basic salary. Employees earning AED 16,000 or less per month are required to pay a premium of AED 5 per month (AED 60 annually). Employees with a basic salary exceeding AED 16,000 per month are required to pay a premium of AED 10 per month (AED 120 annually). The insurance premium is based on the employee’s category and salary.

How to File a Claim Under ILOE?

Employees can file a claim under the ILOE insurance scheme in Dubai by submitting the necessary information and supporting documents through the ILOE portal. The claim should be filed within 30 days of the date of unemployment. The claim process involves providing details about the reason for unemployment and the date of termination.

Can Expats Benefit from ILOE?

Yes, expatriates working in Dubai can benefit from the ILOE insurance scheme. The scheme is open to both Emiratis and expatriates who meet the eligibility criteria. Expatriates who have a valid work permit in Dubai and experience involuntary loss of employment are eligible to avail the benefits of the ILOE insurance scheme.

What Happens if I Move Jobs or Leave Dubai?

If you move jobs within Dubai or leave the city, your eligibility and coverage under the ILOE insurance scheme may change. Moving jobs within Dubai may impact your category and eligibility for the scheme. It is important to inform the relevant authorities and update your information to ensure uninterrupted coverage. Leaving Dubai or finding a new job may require reassessment of your eligibility and coverage under the scheme, depending on the specific circumstances.

Are There Any Exemptions to ILOE Registration?

While registration for the ILOE insurance scheme is generally mandatory for employees in Dubai, there are certain exemptions. Domestic helpers, temporary contract workers, retired citizens entitled to a pension who have joined a new job, and employees under 18 years of age are exempt from the registration requirements. Additionally, employees working in the UAE free zones and in semi-governmental entities, except those working in the Dubai Financial Center and Abu Dhabi Global Market, are not required to register for the ILOE insurance scheme.

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