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UAE Cabinet Introduces New Mechanism to Achieve Emiratisation Targets in Private Sector Companies

Private sector employers were previously expected to achieve a 4 percent target by the end of 2023 under the government’s Emiratisation efforts

The UAE cabinet has announced new Emiratisation rules which require private sector companies with at least 50 employees to ensure that 3 percent of their workforce is made up of Emiratis by the end of June.


“The cabinet was briefed on the developments of Emiratisation programmes in the private sector, and issued a decision regarding the amendment of some provisions related to the goals of the Nafis initiatives,” a statement by the UAE Government Media Office reads.


“The annual target for Emiratisation is [now] divided throughout the year by 1 percent in the first six months of the year and the other 1 percent in the second half of the year.”



UAE Emiratisation rules


In line with the amendments of the provisions of Cabinet Resolution No. 5/19 for 2022, companies will now be required to increase Emiratisation in skilled jobs by 1% every six months, while remaining on track to achieve the overall 2% target by the end of the year.


This step supports the continuity of the Emiratisation pace in the private sector year-round, in line with the directives of the Government of the UAE, which prioritizes Emiratisation in its national strategy and agenda.


The amendments do not include any additional commitments on the companies, nor any amendments to the amounts of financial contributions imposed for non-compliance.


However, these contributions will now be collected semi-annually, encouraging the private sector to continuously employ Emiratis to meet their targets, instead of waiting until the end of the year.


Private sector employers were previously expected to achieve a 4 percent target by the end of 2023 under the government’s Emiratisation efforts.


The target was eventually set to rise at 6 percent in 2024, 8 percent in 2025 and 10 percent in 2026.


While the Emiratisation target at the end of the year remain in place, private sector companies must ensure that 2 percent of their workforce are Emiratis by June.


Free zone companies are exempt, however, they are encouraged to participate in the Emiratisation.


In addition, the Ministry of Human Resources and Emiratisation (MoHRE) also said that companies would not face further financial penalties for non-compliance, however, fines will now be collected every six months.


“The financial contributions on companies that do not meet the target for the first half of 2023 will begin in July 2023, and the contributions for non-compliance from 2022 will continue to be collected,” the ministry said.



New Mechanism for Achieving Emiratisation Target


The overall mechanism for achieving the targeted Emiratisation rates has not changed; it became semi-annual instead of annual. Companies with more than 50 employees are required to achieve an increase of 1% of skilled jobs every 6 months and reach a growth of 2% by the end of the year.


The annual 2% Emiratisation growth for skilled jobs in 2022 for private sector companies and the 10% goal for 2026 have not been changed in this resolution.


The resolution aims to accelerate achieving Emiratisation targets and employing UAE nationals in the private sector throughout the year.


The financial contributions for non-compliant companies have not been modified.


The resolution plays a significant role in enhancing the workforce planning without overlapping with the Emiratisation targets, as there will be no new or additional commitments on companies.


Financial contributions on non-compliant companies will start to be applied in July 2023, as well as the remaining contributions from 2022.


Reference:

Arabian Business: https://shortest.link/hbY6


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