UAE: How does the UAE enforce minimum Emirati employment targets in the private sector?

 

The UAE has through the Federal Decree Law No. 9/2024, recently amended the Federal Law Regarding the Regulation of Employment Relationship 2021 to discourage Fictitious Employment that has been taking place in the UAE to fulfil the Emirati Employment Targets. The law aims to effectively implement the Emiratization Policy that the UAE government has introduced to employ Emirati citizens in high-skilled jobs.

Emirati Employment Targets

The Ministerial Resolution No. 279 of 2022 issued by the Ministry of Human Resource and Emiratization, had imposed a target of increasing the Emiratization rate from high-skilled jobs by 2 per cent annually to gradually bringing the percentage to 10% by 2026. The decision in summary had an objective that in any establishment employing 50 or more workers, Emirati citizens must constitute 10% of an establishment’s workforce by the end of 2026. The decision also states that non-complying establishments shall pay AED 6,000 monthly for every citizen not employed by them.

In 2023, the Ministry imposed a similar target for companies employing 20 to 49 workers to employ one Emirati citizen in 2024 and another Emirati in 2025 in prescribed economic activities. Non-complying establishments are subject to a fine of AED 96,000 in 2025 and AED 108,000 in 2026 for each non-employed Emirati.

The establishments targeted by the above decisions are also subject to follow-up and periodic evaluations by competent control units in the Ministry to ensure compliance with the law. Failure for non-payment can lead to suspension of work permits for that establishment, and other establishments of the violating establishment may also face suspension of grant of work permits and can also lead to reclassification of the estblishment to Category (3). 

Fictitious employment

The recent amendment to the Labor Law deals with fictitious employment of Emirati individuals with the sole aim of complying with minimum Emirati employment targets. It has been found in several cases, that private companies employ Emirati individuals without assigning them any effective work roles and additionally claiming financial incentives designed by the government for such employment.

Although the 2021 law had already provided for a situation wherein a fine was stipulated for leaving an employee without work, the amendment has made the provision more stringent. Changes to Article 60 of the labour law state that the Employer shall in addition to the above-stated fines also be liable for returning any financial incentives that they might have received from the government for each employee. Further, the Employer has been expressly forbidden from seeking a refund of the financial incentives from the Employees.

Conclusion

Since the year is ending for achieving targets for 2024, the MoHRE has advised various establishments to achieve their targets before the end of the year to avoid being subject to fines in the next year. The Ministry has encourages the companies to use platforms like Nafis that can help them connect with Emirati job-seekers across various fields of specialization.

 

For further information, please contact:

Thomas Paoletti, Managing Partner

Paoletti Legal Consultants, UAE

e: t.paoletti@paoletti.com

t: +971529113255

 

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