The Ministry of Human Resources and Emiratisation (MOHRE) recently announced an expansion to the Emiratisation targets imposed on private sector companies in UAE.

Previous Position
All companies with more than 50 employees were previously mandated to raise their Emiratisation rate by 2% annually for overall skilled workers, as follows:

• 50 skilled workers – the minimum target is to recruit one UAE national employee.
• 51 – 100 skilled workers – the minimum target is to recruit two UAE national employees.
• 101 – 150 skilled workers – the minimum target is to recruit three UAE national employees.
• More than 151 workers – one UAE national employee to be recruited for every 50 workers.

Current Position
By way of a cabinet resolution that was announced on 11 July 2023, the MOHRE has now expanded the pool of private companies subject to these Emiratisation targets to include companies with 20 to 49 employees. Through the cabinet resolution, companies falling under this bracket are now required to hire:

(a) at least one UAE national in 2024; and
(b) one UAE national in 2025,

(hereinafter referred to as the New Emiratisation Rule)

At present, we understand that the MOHRE is specifically targeting entities in the UAE which are carrying out economic activities in the following sectors:

• 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               • Hospitality and Residency services

The targeted companies 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 Emiratisation priorities.

Penalties for Non – Compliance
The fines for failing to meet the targets set out in the New Emiratisation Rule is AED 96,000 for 2024 and AED 108,000 for 2025.

Next Steps
It is not yet clear whether the New Emiratisation Rule will be calculated on the basis of the skilled workers employed by companies in the aforementioned sectors. The MOHRE is expected to clarify this position pursuant to a cabinet resolution (which has been issued but has not been made available to the public yet).

Should you have any questions about this legal alert, please do not hesitate to contact Adil Shafi or Devvrat Periwal. 

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Contributor

Mehak Kampani