Entry into force of a new classification system for private sector companies: UAE

ABU DHABI: A new classification system for private sector companies, developed under Cabinet Resolution No. 18 of 2022, and its relevant Ministerial Resolutions will come into effect on Wednesday, June 1, 2022, the Ministry of Human Resources and Human Resources has announced. of Emiratization (MOHRE).

The new system, which classifies companies into three distinct categories, depends on how well companies comply with the law and the wage protection system, protect workers’ rights and comply with the policy to promote diversity. cultural and demographic.

Dr. Abdulrahman Al Awar, Minister of Human Resources and Emiratization, told a press conference last week that the ministry will continuously support the UAE’s efforts to achieve global leadership in business while supporting national goals. keys, with a focus on promoting emiratization programs and empowering the UAE. talents.

Dr. Al Awar pointed out that the new business classification and its relevant resolutions aim to meet the demands of business owners and protect workers’ rights, while encouraging innovation and promoting the SME sector. The classification offers rewarding incentives to businesses that commit to comply with prescribed laws and policies on the promotion of cultural and demographic diversity, in line with the values ​​of UAE society, which are based on tolerance and equal opportunity. for everyone.

Companies in the first category must meet at least one criterion in the new system. The criteria include increasing the company’s Emirati rate at least three times above the target, cooperating with the ‘Nafis’ program (federal program aimed at increasing the competitiveness of Emirati human resources and their to provide the means to take up jobs in the private sector) to train at least 500 Emiratis annually or be a young citizen-owned company according to the standards approved for this. Other criteria are to be one of the training and employment centers that support the implementation of the workforce planning policy by promoting cultural diversity in the UAE or to be active in the targeted sectors and activities determined by the firm.

According to the ministry, the rate of emiratization is 2 percent per year for high-skilled jobs in establishments that employ 50 or more workers, until reaching the target of 10 percent by 2026.

Companies that do not meet any of these criteria, while committing to the law and policy of promoting cultural and demographic diversity in the UAE, will automatically be placed in the second category.

Companies that show a lack of commitment to protecting workers’ rights or fail to promote cultural and demographic diversity in the UAE labor market will be in category three.

Saeed Al Khoury, Undersecretary for Human Resources of MOHRE, said that the entry into force of the new system enhances the sustainability of private sector business growth, protects the rights of investors and workers and strengthens the business environment. business in the UAE, which has exceeded many global competitiveness indicators.

The new system, he explained, sets clear and transparent standards and incentivizes compliant companies to enrich the working environment in the country and increase its attractiveness for talent and skills from within and outside the country. outside the country.

“The new system is based on the strategic vision of the ministry which supports and strengthens national talents and skills, maintains the attractiveness of the labor market for global talents and highly qualified people, protects workers and employees, offers maximum safeguards for their rights, and enables and promotes companies’ ability to achieve sustainable growth,” he added.

The classification will be accompanied by updates on service fees for work permits and transfer fees in line with the business classifications. Fees will not exceed AED 250 for Tier 1 companies for two years, while Tier 2 companies will be charged AED 1,200 for two years. Tier 3 companies will not be eligible for any fee discounts and the fee for issuing or renewing work permits will be AED 3,450 for two years. Activities involving the employment of citizens of the United Arab Emirates and the Gulf Cooperation Council are exempt from this fee.

Businesses may also be classified as Level 3 if they commit other offenses stipulated in Ministerial Resolution No. 209 of 2022, including issuing a final determination that the establishment has committed a crime of human trafficking ; used or recruited workers without obtaining a work permit; provided incorrect data, documents or information to the ministry; violated obligations relating to worker wages, housing and safety standards; resorted to bogus emiratization practices; or committed other serious violations.

The decision to increase annual Emiratization levels in private sector companies comes with unprecedented benefits, including the reduction of Ministry of Human Resources and Emiratization fees by up to 80% for companies in the private sector for achievements in hiring and training citizens in partnership with Nafis. program.

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