The New Standards For Emiratization In The UAE

In the UAE, Emiratization has been and is now a hot topic, especially in light of the promotion of foreign investment and the easing of limits on foreign ownership.

The Ministry of Human Resources and Emiratization (MHRE) recently released a new Ministerial Decision regarding Emiratization in the UAE following the passage of the new UAE Federal Labour Law on 2 February 2022. This article delves deeper into the new Emiratisation standards that support the UAE’s ambitious goal of adding 75,000 new private sector employees by 2025.

Previous UAE Attempts To Emiratize

In the last ten years, the UAE has significantly increased Emiratization. While quotas for Emiratization in the banking and insurance industries have always been necessary (4% for banks and 5% for insurance), a kind of labour market testing for businesses with headcounts of 50 or more was introduced in January 2017 as a more stringent enforcement measure for employers. With the intention of boosting Emiratization, programmes like “Tawteen” and the Nafis Scheme required firms to achieve a standard of hiring 2% Emirati nationals after they reached a workforce of 50 or more workers, which in practice meant a headcount of one Emirati national for every 50 workers. As part of the UAE’s “Projects of the 50,” the Nafis Scheme went even further and reaffirmed the UAE’s goal to meet a 10% Emiratisation quota by 2025.

New Emiratization Requirements

All employers who fall within the purview of the Ministry of Human Resources and Emiratization are subject to the new Emiratization criteria (i.e. outside of the free zones).

Companies in the private sector with 50 or more employees are obligated to increase the proportion of Emirati workers on the staff above their present quota by 2% annually until they reach 10% in 2026. According to the total number of qualified employees in the organisation, the precise number of Emiratis needed will be determined.

Another thing to think about is that category 4 of the five skill sets now requires certification; a role that fits under category 4 is a security guard. Category 5 is the lowest of the five skill set categories.

Employers must make sure that they abide by all labour laws, that they have given each UAE national a work permit and employment contract, registered them with the appropriate pension authority, and paid them through the Wages Protection System before Emirati nationals can be counted against the quota. Companies should remember that when determining the allocation, Emirati employees hired before January 2023 will not be taken into account (although this may change depending on the employer’s current Emirati employee count and the make-up of their workforce).

The new Emiratization regulations include sanctions for failing to adhere to the quotas. For each Emirati employee that falls short of the required quota, each employer who does not adhere to the applicable Emiratisation rate will be penalised AED 6,000 per month. This fine will rise by AED 1,000 every month and AED 12,000 annually.

The Ministry of Human Resources and Emiratization has also announced modified terms for Platinum membership of the Tawteen Partners Club in addition to the new Emiratisation standards. Employers must now train at least 500 Emirati nationals annually through the Nafis programme or increase their Emiratization quota by at least three times the required annual ratio (assuming there are at least 30 Emirati employees on staff) in order to qualify for Platinum membership.

Emirati Talent Acquisition And Retention

Many firms may face difficulties as a result of the new Emiratization legislation, which requires businesses with 50 or more employees to increase their Emiratisation quota by 2% annually. It’s challenging to find and keep Emirati talent in the UAE labour market, which is why it currently appears that any existing Emirati employee population (depending on employee headcount) won’t be considered when setting the quota. 

It is, therefore evident that Emiratisation will bring about changes which will be impactful and at the same time beneficial for both employers and Emiratis. One thing that needs to be thought about is how and when the implementation of current strategy can be placed. Once decided, it will be nothing less than a boon for UAE.

In an effort to recruit and keep talent, businesses may want to think about using a range of strategies to address the achievement of these aims, such as short- and long-term incentive programmes, training programmes, and overseas secondment efforts.

Read more of our blogs here.

Looking to hire emiratis for your organization? Connect with us at info@skillplay.me and we’ll help you get started.