Initially on June 6, 2022, MOHRE (the Ministry of Human Resources and Emiratization) issued the Ministerial Decision 279 of 2022 outlining that the companies in the private sector with over 50 employees must meet specified Emiratisation rates, more specifically a 2% rate by the end of the year, 4% by the end of the following year (2023) with a yearly increase of 2% until the employers have reached a quota of 10% of UAE citizens operating in skilled roles.
On July 11 of the current year, MOHRE (the Ministry of Human Resources and Emiratization) updated its Emiratisation targets under the ministerial resolution 455 of 2023 encompassing the smaller business with a workforce of 20 to 49 employees. Under the new decree, the companies falling under this category are required to hire at least one UAE national by the end of next year and another in 2025.
The fourteen sectors which are being listed in the Cabinet Resolution are: administrative and support services, arts and entertainment, construction, education, financial and insurance sector, healthcare and social work, hospitality and residency, information and communications, mining and quarrying, professional and technical activities, real estate, transformative industries, transportation and warehousing, wholesale and retail.
The penalties for non-complying with the resolution are quite steep and the defaulting business will be subject to a 96,000 Dirhams fine which may further increase to 108,000 Dirhams in the following year. It is worth mentioning that if one of the UAE nationals leaves the company, a replacement must be found within two months of departure; should this not be possible, then the employer must pay the contribution for the targeted year if the number of UAE nationals has been reduced.
According to Dr. Abdulrahman Al Awar, Minister of Human Resources and Emiratisation, “expanding the establishment targeted by Emiratisation targets will have a positive impact and bring benefits for both our citizens and establishment themselves, where the latter will be able to benefit from the support of the Nafis program.”
Launched on September 13, 2021, Nafis Program (which translates as “to compete” in Arabic) is a federal program aimed at supporting Emirati nationals to develop their career and their employment in the private sector. The program’s main objective is to create a partnership between the private companies and the public sector by creating incentives in order to accelerate the UAE’s economy.
MOHRE’s latest decision is meant to create more job opportunities for the UAE nationals and at the same time to support the small business enrolled in the Nafis program. Companies are required to participate in the program, to tap into its benefits and contribute to the UAE’s economic growth, Emiratisation not being about meeting quotas but an opportunity to foster diversity and inclusion within the workplace. We advise all our clients and the companies falling under this category not to delay the registration with Nafis and comply with the latest resolution within the stipulated time frame. For any additional information feel free to reach us at:
+971.4.4221944, or email us via: firstname.lastname@example.org – www.alsafarpartners.com
Mr. Eduard P. Nedelcu, ESQ. – Head of Arbitration Law Department at Al Safar and Partners Law Firm.