In June 2022, we produced an article regarding Emiratisation in the United Arab Emirates (UAE). Emiratisation is an initiative by the UAE Government to increase the employment of UAE nationals within the private sector. The Ministry of Human Resources and Emiratisation ("MoHRE") has, however, recently announced the initiative will be expanded, with new rules affecting specific establishments as outlined below.
Who is affected by the new rules?
As announced by MoHRE, Emiratisation targets will now include companies and individual establishments with a workforce ranging from 20 to 49 employees carrying out specific economic activities (set out below). This is significantly wider than the previously announced rules which apply to companies with 50 or more employees.
Private establishments in the following sectors that meet the employee threshold will be required to comply with the new rules:
- 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
What is required to comply with the rules?
Those impacted by the new rules are required to hire at least one Emirati in 2024 and another in 2025.
Penalties for non-compliance
Establishments that fail to comply with the new rules will be fined:
- AED 96,000 in January 2025 if they have not hired at least one Emirati in 2024; and
- AED 108,000 in January 2026 if they have not hired at least two Emiratis by the end of 2025.
What should your business be doing now?
Businesses should be reviewing their current employee figures to determine whether they need to comply with the rules. Should they need to comply, they will also need to determine whether they need to comply with the new rules set out above, or those set out in our earlier briefing for companies with 50 or more employees.
Moving forwards, it will be important for businesses to have up-to-date figures for the number of UAE nationals employed and a method for tracking resignations of such employees to ensure ongoing compliance with the rules.
Whilst the rules for companies with 50 or more employees have now taken effect, those affected by the recent decision above have until the end of 2024 to comply with the new rules. Affected companies should therefore look to take action now to avoid potential risks and fines and to adapt current recruitment and retention strategies.
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