All companies have to know the essential details on how to achieve the objectives of Emiratisation in private sector. Currently, there are ambitious objectives from the government in the UAE to increase the employment rate. Specifically, for local citizens in the private sector. The general objective is to increase the employment rate of local citizens in the private sector to 2% by the end of 2023. To achieve this goal, there are regulations and mechanisms that companies have to comply with.
In this article, we will provide you with some key tips on how to achieve your Emiratisation goals in the private sector. These recommendations include hiring local citizens, skills development, and training. We will talk in detail about the general objectives of the emiratization and the Nafis initiatives. Additionally, we will discuss the fines and sanctions faced by companies that do not meet the Emiratization goals.
Emiratisation Targets and Nafis Initiatives
Among the main objectives of Emiratisation in private sector is to increase the number of Emiratis in the workforce. That is, therefore, the aim is to reduce the country’s dependence on foreign labor. Thanks to this, the law aims to create more job opportunities for Emirati workers. Especially in highly skilled and better-paid jobs.
Emiratisation in private sectors seeks to improve the skills and capabilities of Emirati workers. For this, it is intended to use training and development programs to make them more competitive in the local labor market. One of the Nafis Initiatives is to address the low levels of youth employment among Emiratis. That is, ensuring that young people looking for work have equal access to quality education, prospects, and job training.
The new emiratization policy uses different strategies to achieve the objectives. Among the objectives for Emiratisation in private sectors are the following.
Partnership with the private sector: The policy recognizes that the private sector is a key driver of job creation and economic growth. That is, you can seek to work in partnership with the private sector and thus create more job opportunities for Emirati citizens.
Training and development programs: Emiratisation in private sectors policy includes a range of training and development programs. Which are intended to improve the capabilities and skills of Emirati workers. Thus, they can be more competitive in the labor market.
Awareness and education campaigns: The government has developed awareness and education campaigns. Thus, they can encourage young Emiratis to pursue careers in highly skilled industries. In addition, it promotes the importance of vocational and technical education.
Regulations and compliance: Thanks to the government there are regulations to ensure that companies comply with the requirements of Emiratisation in private sectors. Additionally, they have established compliance mechanisms to monitor compliance.
Policies, Incentives, and Compliance Measures
Since December 18, 2022, thanks to the Ministry of Human Resources and Emiratization, there has been Ministerial Resolution No. 663 of 2022. Its purpose is to address compliance with Emiratisation in private sector systems. That is, it defines the controls of commitment to the Emiratization systems, obligations of the employer when hiring a citizen, job advertisements, and allowing the citizen to carry out their work. In addition, they can provide them with a place and the right tools and avoid fines and penalties.
The most important policies you need to know are the following.
- Define obligations, fines, sanctions, and controls for not meeting the main objective.
- Prohibit establishments from making reference to government policies or their benefits in Emiratisation job advertisements.
- Prevent subliminal or misleading advertising that does not represent available and real job opportunities at inappropriate professional levels.
- Expanding the Emiratisation process requires controlling all aspects of such an important national file. That is, define the obligations and duties of all parties. In addition to enacting the necessary laws to control the abuses that have been recently witnessed. The Ministry is constantly working on what happens in companies. This way, they can identify necessary remedies and ensure that all parties comply.
As part of the 50’s Projects, the Nafis program and the Nafis awards entered the market. Both have the purpose of being an engine for the development of the national economy. The importance of Nafis’ functions during the first year since its launch is to highlight the benefits of working for the private sector. In addition, encourages citizens in the UAE to seek professional opportunities in private establishments.
All this has presented contribution to strengthening their presence as an influential workforce. In addition, the advancement of this vital sector and improving its functioning in the progress of the economic development of the nation.
The idea of the Nafis Award is to highlight successful experiences in three main categories. These categories align with leadership aspirations and support the UAE’s efforts in empowering Emirati talent. Specifically, to fill vacant positions in the various sectors and fields of the private sector.
First category: It is for private companies that are part of the Nafis platform. Specifically, those that achieved the Emiratization objectives according to the following subcategories. The first is large companies (more than 1000 employees). The second is medium-sized companies (between 500 and 999 employees. Finally, small companies (less than 499 employees).
Second category: It is for individuals who have any of the following specialized categories and have registration in the Nafis learning program. That is medical, nursing, legal, financial, retail, and other jobs.
Third category: It is for the strategic partners, in gratitude for their contributions and efforts to achieve the council’s visions regarding Emiratization.
Guidelines for Promoting Emirati Employment Opportunities
In the United Arab Emirates, work has been underway on various rules and regulations to promote Emiratisation in the private sector. These regulations are intended to increase the number of qualified Emiratis contributing to the national economy.
All these regulations mainly affect companies that are under the jurisdiction of MoHRE. That is, it is the Ministry of Human Resources and Emiratization. Specifically, this is for those companies that carry out commercial activities on the continent. All private sector companies with 50 or more workers have to increase their Emirati workforce. To do this, they have to use a quota system of 2% annually until the company reaches 10% by 2026.
According to MoHRE, employers must hire Emiratis for skilled jobs. These workers must meet some of the following qualifications.
- Have a degree equivalent to high school or higher than high school.
- Have a worker certificate authenticated by a competent authority.
- The applicant has to earn a minimum salary of AED 4,000 per month.
- Be part of a specific category. For instance, executives, legislators, professionals in technical, scientific, and human fields, business managers, and others.
In order for companies to offer jobs to Emirati citizens, they have certain restrictions, which are.
- They cannot post misleading ads that do not represent genuine job opportunities.
- There is a ban on referring to the government’s Emiratization policies and their benefits.
- They cannot provide information on government incentives and support programs for nationals in the private sector.
Obligation for Employers
Hiring emiratis is essential and employers must provide them with a place to work. In addition, they must offer them the appropriate tools and minimum job training that allows them to perform their functions correctly. Additionally, they must comply with the following:
- Obtain for them an Emirati work permit from the MoHRE.
- Make an Employment contract.
- Make salary payments by the provisions of the Salary Protection System.
- Must register Emirates in the pension and social security system. Thus, you must begin contributing within one month from the date your work permit is issued.
- You must report modifications to the employment contract that may directly affect the eligibility requirements for the Nafis program.
At the time of concluding the employment contract, the employer must immediately cancel the national’s work permit. Furthermore, the employer should not deduct the salaries of Emirates under the pretext of enjoying the benefits of the government support program. On the other hand, it will not be able to pay lower salaries to the Emirati workforce compared to counterparts occupying the same position.
Concerning private sector Emiratisation, employees must comply with:
- The obligations that are provided for by the Decree Law on the Regulation of Labor Relations and its Executive Regulations. In addition, the decisions that are issued for its development.
- All decisions related to the Nafis program.
- The obligations that are provided for in your employment contract.
In this way, any practice that violates the provisions of the emiratization regulations must be notified to the MoHRE by the affected emirates.
Consequences of Non-Compliance with Emiratization Targets
You find that in Cabinet Resolution number 95 of the year 2022; about sanctions and violations related to the initiatives and programs of the Emirati Cadres Competitiveness Council; Administrative sanctions and fines are listed for companies that violate the Emiratisation targets and Nafis. In addition, sanctions and fines may vary according to the nature of the infraction committed.
Emirates compliance is essential and that is why it is important to know about violations. For this reason, these will be presented below:
- All companies that have a false Emiratization and present false data or documents to obtain the benefits that are associated with Nafis.
- If the employee does not return to work after his or her work permit is issued and support from Nafis continues to be received.
- When the Nafis beneficiary employee does not show his commitment to work and his employer does not notify him.
- If the company does not employ the Emirati after he or she has completed the training program. Furthermore, without receiving a valid justification from the company.
- The firm did not notify about any change in beneficiary terms without a reason acceptable to Nafis.
On the other hand, more administrative sanctions and fines were recently added for those companies that violate these emiratisation objectives. Thus, if you want to start a company in the UAE, you should be aware of the following fines for failing to comply with Emiratisation:
- If the company does not meet the emiratisation targets for the first time, the fine they will face will be AED 100,000.
- If the company fails to meet these targets again, the fine will increase to AED 300,000.
- Finally, if this happens a third or subsequent failure to meet the objectives, the company will face a penalty of AED 500,000.
Pension Contributions as per Federal Law No. 7 of 1999
By the provisions of Federal Law No. 7 of 1999 regarding Pensions and Social Security and its modifications; A monthly contribution equal to 20% of the employee’s salary must be made to the GPSSA. On the other hand, the employee will have to contribute 5% of his salary, the employer 12.5% of the employee’s salary, and the government will have to contribute the remaining 2.5%.
According to Article 2 of this law, the private sector employer and the nationals who work in it; must join the Committee by the provisions of this law. Also, the same concerning people who are not subject to any of the other laws regarding pensions and social security of the state.
In this way, we find that, in this law, the Minister of Finance and Industry will be in charge of issuing the regulations. Likewise, the decisions that are necessary for the application of what is provided in this Law. In addition, any provision that contravenes or contradicts the provisions herein will be repealed.
The UAE government has set an ambitious goal of generating 75,000 new jobs in the private sector for Emirates by 2025. For this reason, if you want to take advantage of the most profitable business ideas in Dubai you should know about emiratization. To achieve this objective, regulations were implemented that are applied to all private sector companies with 50 or more employees.
Thus, regulations require companies to increase their workforce of Emirati citizens by 2%. In addition, this must be done annually until 10% is reached in 2026. On the other hand, those companies that have between 20 and 49 employees must also comply with some emiratization requirements from 2024.
There are many ways to meet these objectives. However, how to hire Emirati employees, no matter how easy it may seem, can seem like a challenge. For this reason, a UAE human resources council is seeking help from companies specializing in these issues.