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Emiratization update: UAE requires smaller firms to hire Emiratis or pay hefty fines

The UAE expanded its Emiratization requirements on Tuesday to include some private sector companies with less than 50 employees.

Private establishments with 20 to 49 employees must hire at least one UAE national in 2024 and a second by 2025, according to an update to the Gulf nation’s Emiratization targets set by the Ministry of Human Resources and Emiratization (MoHRE).

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Failure to hire according to the latest guidelines will result in a $26,100 (AED 96,00) penalty at the beginning of 2025 and a $29,400 (AED 108,00) fine at the end of 2026, levied on the non-compliant firms.

If a penalty is levied, the company may pay the amount in installments.

“The decision aims to increase the number of Emiratis employed in targeted establishments across 14 key economic sectors, requiring them to hire at least one UAE citizen in 2024 and another in 2025,” the government body said in a statement.

In implementation of a UAE Cabinet Resolution, the Ministry announces the expansion of the private sector establishments’ pool, subject to Emiratisation targets, to include companies and individual establishments with a workforce ranging from 20 to 49 employees in specific… pic.twitter.com/xDZfILPd7M

— وزارة الموارد البشرية والتوطين (@MOHRE_UAE) July 11, 2023

The 14 sectors mentioned include information and communications, financial and insurance activities, real estate, professional and technical activities, administrative and support services, arts and entertainment, mining and quarrying, transformative industries, education, healthcare and social work, construction, wholesale and retail, transportation and warehousing, and hospitality and residency services.

The new rules are based on a study of economic sectors in the UAE as well as business activites and the nature of work in smaller companies, according to Abdulrahman al-Awar, Minister at MoHRE.

“Expanding the pool of establishments subject to Emiratization targets is based on a study of the economic sectors in the UAE and the business activities and nature of work of companies with 20 to 49 employees, which indicated the rapid growth this segment of establishments is experiencing and its ability to provide additional jobs and a suitable work environment,” the minister was quoted as saying by the state-run Emirates News Agency (WAM).

He added: “These conditions will attract UAE citizens to work at these establishments, providing a strong boost to Emiratization endeavors and enhancing the private sector’s contribution to this national initiative, which has achieved remarkable results…”

“We are confident that expanding the establishments targeted by Emiratization targets will have a positive impact and bring benefits for both our citizens and the establishments themselves, where the latter will be able to benefit from the support of the Nafis program.”

Nafis is a federal program seeking to increase the involvement of UAE citizens in the country’s private sector over the next five years.

The program offers a wide-ranging support ecosystem, including salary support schemes, unemployment benefits, and on-the-job training.

The latest update comes after the UAE mandated that by January 1, 2023, companies with more than 50 employees must have ensured that at least two percent of their staff are UAE nationals under a government drive to encourage more citizens to enter the sector.

The UAE hopes to achieve a one percent semi-annual Emiratization growth.

Companies that fall under the latest ruling will be informed via the Ministry’s digital channels, it said, adding that the firms will be “chosen based on criteria such as types of jobs, work environment, geographical location, nature of growth in these economic sectors, as well as Emiratization priorities.”

Stricter penalties apply if an establishment is caught evading the rule or providing false information.

In an instance reported by WAM in December 2022, a private company director was arrested for faking the employment of Emirati citizens. With the intentions of obtaining the benefits and financial support provided by Nafis and other Emiratization programs, the suspect forged documents, faked employment contracts, and falsely stated that his company had hired Emirati citizens.

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Original Article