UAE: Companies Must Maintain Emiratisation Target Throughout The Year To Avoid Fines

Firms in the United Arab Emirates must ensure to meet and maintain the Emiratisation target throughout the 12 months to avoid any penalties.

The UAE’s Ministry of Human Resources and Emiratisation (MoHRE) has made it mandatory for firms with over 50 employees to increase their Emiratisation quota to two percent for skilled jobs by the end of 2022. The quota is increased to four percent for 2023.

Last week, the ministry announced that Dh400-million worth of fines were issued to firms for not meeting 2022’s target last week.

Establishments were fined Dh72,000 for each Emirati that was not hired. The fine is increased to Dh84,000 for 2023 for not hiring each Emirati.

Therefore, companies who failed to meet the two per cent Emiratisation target by December 31, 2022, will now have to speed up efforts to achieve a four per cent target this year.

Joanna Matthews-Taylor, partner, Baker McKenzie, said all companies in the UAE will be required to meet the four per cent Emiratisation quota by December 31, 2023. Failure to meet the quota by December 31 will incur fines of Dh7,000 per month for each Emirati national short of the quota starting from January 1, 2024.

Joanna added that companies will need to maintain Emiratisation during the entire 12 months of the year.

“MoHRE is assessing companies and calculating the fines on a month-to-month basis. For example, if a company meets the quota for the months of January, February, and March 2023, but subsequently falls below the quota for April and May, then fines will be imposed for the months of April and May 2023,” she added.

MoHRE had said that if a UAE citizen hired by a private company resigns, the firm will have to get an Emirati replacement “instantly” to meet the Emiratisation target as stipulated by the law. No exceptions will be made, the ministry stressed.

“The establishment shall be considered non-compliant if the required number of employed Emiratis is not maintained until the following year. The establishment, in that case, shall be under obligation to pay the required contribution (annual fine),” the ministry had explained.