New insurance system from October 15
MINISTRY READY TO ISSUE DOCUMENTS AND REFUND BANK GUARANTEES
Ministry ready to issue insurance documents, refund bank guarantees to employers |
The Ministry of Human Resources and Emiratisation (MoHRE) has said that the issuance of employee insurance will begin on October 15.
This comes as per the Cabinet’s decision to scrap the compulsory bank guarantee and replace it with a low-cost insurance system, according to the ministry.
Aisha Bel Harfia, Assistant Undersecretary for Domestic Worker Affairs, said the ministry has taken all necessary measures to begin issuing insurance documents and refunding bank guarantees to the employers, starting from the aforementioned deadline.
She said that establishments registered with the ministry will have two options. The first is to buy insurance that can be issued immediately when typing the work permit application at Tasheel, or other establishments that can complete their own applications using the Tasheel e-service.
The other option is to submit a Dh3,000 bank guarantee on behalf of the employee, as per the rules and regulations of the current bank guarantee system, which will be available alongside the new insurance system.
This will allow employers to pick the option that suits them.
Bel Harfia clarified that the insurance document for domestic workers will be issued upon submitting applications through either Tasheel or Tadbeer service centres. Insurance documents for private sector employees and domestic workers registered with the ministry will be issued through an insurance conglomerate that includes national insurance companies operating in the UAE, which have been chosen according to specific criteria.
Employee-friendly policy
The bank guarantee is replaced by a new insurance policy that costs just Dh60 annually per worker, giving a coverage of Dh20,000 per worker covering end-of-service benefits, vacation and overtime allowance, unpaid wages, return ticket and cases of work injury.
Domestic workers’ insurance policies also cover the cost of replacing the worker in cases of his/her interruption of work, health issues or the desire (on the workers’ part) to cancel the working relationship, in addition to unpaid wages and endof-service, leave and overtime allowances, in case they have not been paid by the employer, as well as a return ticket.
Bel Harfia said MoHRE will start refunding bank guarantees to employers, totalling about Dh14 billion as of October 15.
She added the bank guarantees will be refunded to establishments when cancelling work permits covered by these guarantees, or when purchasing the insurance policy on renewing the employee’s work permit, on the condition that the establishment has not committed violations related to non-payment of salaries.