The deadline for enrollment in the UAE's Involuntary Loss of Employment (ILOE) scheme is quickly approaching, with fines awaiting those who fail to comply. This article will provide comprehensive information about the ILOE scheme, including its mandatory nature, eligibility criteria, payment process, associated fines, and more. Read on to ensure you understand this essential job security net.
Is Enrollment in ILOE Mandatory?
Yes, it is mandatory, and employees who do not enroll will face fines.
Can Unregistered Companies Enroll Their Employees?
Yes, unregistered companies can enroll their employees by submitting their trade license and a request letter to companyreg@iloe.ae, as stated on the ILOE website.
What Are the Penalties?
1. Employees who do not enroll by the October 1 deadline will face a Dh400 fine.
2. If an employee enrolls but fails to pay premiums for more than three months from the due date, their insurance certificate will be canceled, and they will incur a Dh200 penalty.
How Will Fines Be Collected?
Employees must pay the fines, which, if unpaid for three months from the due date, will be deducted from their wages through the Wage Protection System, end-of-service gratuity, or other acceptable methods according to a ministerial resolution.
Can Non-Payment of Fines Affect Job Prospects?
Yes, a ministerial resolution states that employees will not be eligible for a new work permit until all due fines are paid within the specified timeframe.
Who Is Exempt from the Scheme?
The following categories are exempted from the ILOE scheme:
1.Investors (owners of the companies they work for)
2.Domestic helpers
3.Temporary contract workers
4.Juveniles under 18
5.Retirees entitled to a pension who have joined a new job
How Can Employees Enroll in the Scheme?
Employees can enroll through various channels, including:
1.ILOE website and app (free channels)
2.Al Ansari Exchange
3.Business centers Tawjeeh and Tasheel
4.Etisalat (coming soon)
5.Kiosks (upay and MBMEPay)
6.Botim (coming soon)
How Does the Scheme Work?
Employees must pay an ultra-low-cost premium to enroll in the ILOE. If they lose their jobs for reasons other than disciplinary action or resignation, they are eligible for financial support for up to three months.
When Is Compensation Available?
Employees become eligible for compensation only if they have been enrolled in the scheme for at least 12 months. Subscriptions to the scheme began in January 2023. For example, if someone subscribes in September, they become eligible for compensation after 12 months from September.
What Are the Two ILOE Plans and Their Benefits?
Category A: Basic salary Dh16,000 or below
1.Cost: Dh5 + VAT per month
2.Compensation Benefit: 60% of basic salary, up to Dh10,000 per month
Category B: Basic salary above Dh16,000
1.Cost: Dh10 + VAT per month
2.Compensation benefit: 60% of basic salary, up to Dh20,000 per month
Note: Insurance premiums can be paid monthly, quarterly, semi-annually, or annually.
How Long Are Benefits Offered?
Benefits are provided for up to three months.
Under What Circumstances Are Benefits Ceased?
Benefits cease if the beneficiary gets a new job or leaves the UAE.
What Are the Conditions to Claim Compensation?
To claim compensation, the following conditions must be met:
1.Minimum subscription period of 12 months
2.Timely premium payments
3.The claimant must not have resigned from employment
4.The subscriber should not have been dismissed for disciplinary reasons
5.Claims must be submitted within 30 days from the date of termination or the settlement of the labor complaint referred to the judiciary
6.The employee must not have an existing absconding complaint.