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UAE: Fines For Private Companies That Fail To Meet Emiratisation Requirements

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Staff Writer, TLR

Published on July 14, 2023, 17:41:00

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UAE government announces fines private companies fail

The UAE government announces fines for private companies who fail to attain the Emiratisation target by July 1.

The firms will be fined AED 7,000 for each UAE national who has not been hired. Penalties will be now charged semi-annually and not at the end of the year.

Additionally, the firms are required to increase the number of Emirati employees by 1% every six months.

Emiratisation was formed under the government’s Nafis initiative which is a federal program intended to improve the competence of Emirati human resources and make them capable of getting jobs in the private sector. The international reputation of the UAE attracts workers from across the world. This resulted in the country shouldering the pressure of an ever-declining demand for natives in the private sector. To counter this, the UAE introduced the Emiratisation initiative. Quite like the Saudizatian policy of the government of Saudi Arabia, this initiative requires that private firms with more than 50 employees have at least 2 percent of their skilled workforce be Emirati. This target is by the UAE cabinet’s resolution to increase Emiratisation rates of skilled jobs to 10 percent by the end of the year 2026. The current Emiratisation quotas entail 2% for commercial entities with over 50 employees, 4% for banks, and 5% for insurance companies.  The fulfilment of these targets would create 12, 000 job opportunities yearly for workers from all economic sectors.

However, despite constant reminders of the quotas under this initiative, multiple private sector companies failed to achieve the Emiratisation targets for the year 2022. This resulted in the UAE's Ministry of Human Resources and Emiratisation (MoHRE) imposing sanctions on those non-compliant companies from January 1, 2023. The firms that submit false Emiratisation data will be charged with an AED 20, 000 fine. It has further been decided that the failure to meet the required targets will consequently increase the monthly penalty by AED 1,000 annually until 2026.

In December 2022, the MoHRE released a decision concerning the Emiratisation regulations in the private sector. The Ministerial Resolution No. 663 of 2022 specifies the rules and regulations regarding job advertisements, employer obligations, and Emiratisation systems when employing a UAE national.  

The Emiratisation initiative will allow for the country to have a diversity of foreign skills and homegrown talent working together to accelerate the development of the country. 

For any enquiries or information, contact ask@tlr.ae or call us on +971526443004

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