Understanding Emiratisation: Updates on Rules and Fines
In an effort to enhance Emiratisation in the private sector, the UAE government introduced a salary top-up program in November of last year. Under this initiative, Emiratis employed in the private sector are eligible to receive a monthly supplement of Dh7,000.
Boosting Emiratisation in the UAE: Private Sector Incentives and Progress
The objective behind this move is to attract more Emiratis away from government jobs, which traditionally offer higher salaries. Recently, new regulations were announced for companies with 20 to 49 employees, expanding the scope of the Emiratisation drive. Here's a comprehensive overview of Emiratisation in the UAE.
What is Emiratisation?
Emiratisation refers to the government's ongoing campaign to increase the number of Emiratis working in the private sector. While public sector positions have historically been more appealing due to attractive working hours and wages, the government is actively encouraging Emiratis to develop their skills and contribute to the workforce. In September 2022, quotas were established for hiring Emiratis, marking the first time such targets were set. Private sector companies with at least 50 employees were required to ensure that 3% of their workforce comprised Emiratis by July 7. However, recent updates from the Ministry of Human Resources and Emiratisation extended the Emiratisation drive to include companies with 20 to 49 employees across 14 economic sectors.
Targets and Measures
The Emirati employment rate is projected to rise to 6% in 2024, 8% in 2025, and 10% in 2026. To achieve these goals, private businesses are now mandated to gradually increase their Emirati workforce by 1% every six months. The targets apply to skilled positions, and companies operating in free zones are exempt, although their participation is encouraged. Private companies are urged to raise the proportion of Emirati employees by 2% annually, aiming for a 10% Emiratisation rate by the beginning of 2027.
Salary Top-up and Other Benefits
Recognizing the expectations of Emirati university graduates, particularly in terms of starting salaries, the salary top-up program was introduced. For example, an Emirati graduate offered a monthly salary of Dh13,000 in a starting position would receive Dh18,000 under the original Nafis program outlined in September 2021. This amount was increased to Dh20,000 following the decision made in November 2022. Additional benefits are also available, including Dh800 per child per month and up to Dh3,200 per family for those with children.
Consequences for Non-compliance
Private companies failing to meet the Emiratisation targets by the specified deadlines face fines of up to Dh500,000. The Ministry of Human Resources and Emiratisation is actively reviewing companies' compliance and imposing fines of Dh42,000 for each Emirati position left unfilled. Companies found fabricating or misleading authorities regarding their Emiratisation numbers will also face substantial penalties. For businesses with 20 to 49 employees, a fine of Dh96,000 ($26,000) awaits those who fail to employ at least one Emirati in 2024, with the fine increasing to Dh108,000 ($30,000) for those not employing at least two Emiratis in 2025.
Current Trends and Future Plans
As of July 9, approximately 80,000 Emiratis have joined the private sector, with a notable increase of 30,000 within the past six months. Semi-government companies and local banks are currently the leading employers of Emiratis in the private sector, although teaching and healthcare positions have also seen Emirati hires. The government's initial target of creating 75,000 new private sector jobs for UAE citizens has been surpassed, and now the focus is on attracting an additional 75,000 Emiratis to the private sector over the next four years. A recent survey indicated strong interest among Emirati graduates to work in the private sector, particularly among the younger generation. The government remains optimistic about the promising opportunities available and aspires for further growth in Emiratisation.