Maintaining Emiratisation target throughout 12 months to avoid fines in the UAE
Recently, the Ministry of Human Resources and Emiratisation in the UAE has announced new mandatory requirements that companies must meet. As matter of fact, the MOHRE had made clear the Emiratisation quota that firms should have met by 2022. And those firms that did not meet this quota, may face serious consequences.
For those companies that did not meet this target, the Ministry issued AED 400 million worth of fines. Besides, the Ministry also announced that UAE companies will have to meet and maintain the Emiratisation target for 12 months. And this way, they will be able to avoid fines and other penalties.
- What is the new announcement that the MOHRE made?
- What is the Ministry of Human Resources and Emiratisation in the UAE?
1. What is the new announcement that the MOHRE made?
Previously, the Ministry of Human Resources and Emiratisation had made an announcement addressed to companies with more than 50 employees. And it was about the new mandatory Emiratisation quota of 2 percent that companies had to meet by the end of 2022. And now, for 2023, this quota increased to 4 percent.
On the other hand, the MOHRE also made an announcement related to AED 400 million worth of fines. These fines were issued for those companies that did not meet 2022’s target Emiratisation quota. And some establishments got an AED 72,000 fine for each Emirati they did not hire. Besides, the MOHRE increased this same fine to AED 84,000 for 2023.
Those companies that failed to meet the previous quota will have to make an effort to achieve the new goal. And, as we mentioned before, the new goal in 2023 will be meeting a 4 percent Emiratisation quota.
1.1. What will be the fines for not meeting the new quota by the end of 2023?
The Ministry of Human Resources and Emiratisation also announced new fines for companies that do not achieve the new goal. By December 31st, 2023, companies must meet the new 4 percent Emiratisation quota. And failing to meet this quota will lead to fines of AED 7,000 per month for each Emirati national short of the quota starting from January 1st, 2024.
Furthermore, the authorities also mentioned that companies will be required to maintain Emiratisation for an entire year. And currently, the MOHRE is calculating the fines on a month-to-month basis and assessing companies.
For instance, let’s say that an establishment meets the quota for January, February, and March. However, in April and May, the establishment did not meet such a quota. So, in that case, the authorities will impose fines only for the months of April and May.
In addition, you should also know that private companies must find immediate Emirati replacements for UAE citizens that resign. Otherwise, companies will not be able to meet the Emiratisation target that the law stipulates. No exceptions will be made. If the required number of employed Emiratis is not maintained until the following year, the establishment shall be considered non-compliant. And in that case, the establishment will have to pay the required contribution (an annual fine).