Uae to crack down on abuse of wage subsidy scheme

UAE to crack down on abuse of wage subsidy scheme

UAE to crack down on Abuse of wage subsidy scheme

The UAE government is set to crack down on companies that abuse Emiratisation rules and cut salaries for employees in the Emirates.

The Minister of Human Resources and Emiratisation (MoHRE), Dr Abdulrahman Al Awar, said that the government had discovered that some companies were cutting salaries of UAE national candidates and employees, knowing that the individual would receive financial support from the Government through the Nafis initiative.

Under the Nafis scheme, all Emiratis working in the private and banking sectors who receive a salary of less than AED30,000 ($8,000) will be given a financial allowance.

“The Ministry of Human Resources and Emiratisation is closely monitoring the implementation of Emiratisation in the labour market and has come across some unfortunate cases,” the minister said.

“Some companies have been found to reduce salaries of Emirati job candidates, given that Nafis would offer them several benefits, including salary top-ups, when they are hired.

“Therefore, we reiterate that the ministry will be firm in implementing the necessary procedures with any company that attempts to abuse Emiratisation-related policies and decisions, including Nafis benefits.

“MoHRE will address and deal with any such abuse in the right manner.”

The initiative is designed to help to integrate Emirati employees into the private and banking sectors, and includes allowances, bonuses and other monetary incentives for UAE nationals.

Over the next five years, the move will help create partnerships and support more than 170,000 beneficiaries in the private and banking sectors in the UAE., the ministry said.


Positive impact on the economy

Dr Al Awar added: “There is no doubt that raising the levels of Emiratisation will reflect positively on the national economy and will bring great benefits to the private sector in particular, as it will have higher levels of flexibility and greater opportunities to face global and local challenges.”

The scheme covers all the employees in the private and banking sectors, regardless of the date the joined their employer.

“We are on the threshold of a new phase that raises the competitiveness of the business environment by increasing the contribution of Emirati cadres in writing new chapters of the UAE success story,” said Dr Al Awar.

“In the Ministry of Human Resources and Emiratisation, we will directly monitor the impact of supportive programs on accelerating the integration of Emirati cadres into the labour market in the private sector, which is an active partner in the process of progress and development.”

More than 14,000 Emirati job-seekers joined the private sector since Nafis was launched in September 2021 as part of the ‘Projects of the 50’, which aim to accelerate economic growth in the UAE.


UAE gets tough on ‘fake’ Emiratisation

In another development, MoHRE has started imposing fines of up to AED 120,000 ($33,000) on businesses that attempt to fake data to meet Emiratisation targets.

A new Cabinet Resolution on penalties related to the initiative has now been introduced, to crack down on violations to the Emiratisation schemes and limit bad practices through the levying of large fines.

Companies with more than 50 staff members must ensure that 2% of them are Emirati before the deadline of 1 January 2023.

Private sector firms that do not meet Emiratisation targets face fines of AED72,000 ($20,000) a year for every Emirati not hired. A further $5,420 (AED20,000) administration fine will be applied to each Emirati employee.

MOHRE said: “For false Emiratisation or submitting incorrect documents or data to obtain Nafis benefits or to circumvent Emiratisation, there will be an administrative fine on the violated company – not less than AED20,000 and not more than AED100,000 for each Emirati employee, and for the violated employee the financial support will be ceased and they shall return it.”