Emiratisation in the UAE 2024: Laws and Regulations
By
groundworkinsights

In an effort to increase the employment of Emirati nationals in all sectors, diversify the economy, and reduce dependency on foreign labor, the UAE government has launched its revolutionary Emiratisation policy.

The goal of this policy is to facilitate an inclusive and diverse job market with the main focus on integrating more local Emirati talent into public and private industries.

Emiratisation in the UAE: Laws and Regulations

These Emiratisation laws have proven to be effective in bridging the gap between skilled Emirati graduates and suitable job opportunities in the UAE’s competitive business landscape.

In this article, we will delve into the new developments in the Emiratisation laws and policies in the year 2024. This will help you stay informed and avoid potential penalties and fines that come with not complying with the Emiratisation regulations.

Here is all you need to know about the new Emiratisation laws and regulations in the UAE in 2024

  • What is Emiratisation?
  • Emiratisation Targets
  • The New Requirements of the Emiratisation Laws for 2024 i.e.,
  • Increased Scope of Private Businesses
  • Targeted Sectors
  • Monitoring and Compliance
  • Support for the Employers  
  • Requirements of the 2% Emiratisation Law in UAE 
  • Penalties for Failing to Meet the Emiratisation Requirements

What is Emiratisation?

For those of you who are unfamiliar with the term, Emiratisation is simply a policy of the UAE government that aims to facilitate and increase the employment of native Emirati nationals in public and private sector businesses and industries.

One of the aims of the Emiratisation laws and policies is to bring down unemployment rates by creating more job opportunities for the locals. The focus here is to create a strong Emirati workforce that will play its part in the long-term economic growth of the region.

Emiratisation Targets

The Emiratisation laws are designed to achieve a few key targets listed down below

  • Every company, be it public or private, has to ensure that about 4% of their workforce comprises Emiratis.
  • Making sure the private sector employers make conscious efforts to attract and retain local talent.
  • Private companies with more than 50 employees must increase their number of Emirati employees by 2% each year. This rule is applicable to all entities that are not located in the free zones.
  • Every business must meet a 1% increase in Emiratisation every six months and finally achieve a 2% rate by the end of the year.
  • The main target is to achieve a 10% increase in Emiratisation of the workforce by the year 2026.

The New Requirements of the Emiratisation Laws for 2024

Recent Emiratisation regulations announced in November 2023 brought certain changes in the laws.  Following is a brief overview of these changes to give you a better idea.

1. Increased Scope of Private Businesses:

From 2024, all private sector businesses with a workforce of 20 to 49 employees must hire at least one Emirati. The number will be increased to two by the end of 2025.

Increased Scope of Private Businesses

Unlike previous policies, this significant move extends the reach of Emiratisation beyond the earlier threshold which was only for companies that had 50 or more employees on their payroll.

2. Targeted Sectors:

The new policy specifically targets 14 key sectors in the recruitment market of the UAE. Businesses like real estate, financial and insurance, healthcare, IT, and communication are just a few. This has made it possible for Emiratis to find suitable employment opportunities across various fields.

3. Monitoring and Compliance:

The MoHRE or the Ministry of Human Resources and Emiratisation is taking an active interest in monitoring and ensuring compliance through inspections and penalizing breaches.      

4. Support for the Employers:

To facilitate compliance, the UAE government has launched the NAFIS platform. Employers can use the power of Emiratisation in UAE through this tool to hire, train, and incentivize local Emirati professionals. 

Support for the Employers

The goal of NAFIS is to increase the quality and competitiveness of the Emiratis in the UAE’s business landscape.

Requirements of the 2% Emiratisation Law in UAE

According to the latest Emiratisation regulations, entities in the mainland that are registered with MoHRE having more than 50 employees must achieve an annual increase of 2% in the number of Emirati nationals employed in their workforce.

According to this policy if

  • A company has 50 skilled workers, it should have at least 1 Emirati employee.
  • If the number of workers falls between 51-100, a minimum of 2 Emirati employees in the workforce is mandated.
  • If the business has 101-150 skilled employees, it must hire a minimum of 3 Emiratis.
  • And finally, if the total workforce exceeds 151, the business needs to hire 1 Emirati for every 50 workers.

Penalties for Failing to Meet the Emiratisation Requirements

The MoHRE department closely monitors the implementation of and compliance with the Emiratisation policies. Committing violations like reducing the number of employees or modifying their classification can lead to serious penalties and hefty fines.

  • The companies that fail to meet the Emiratisation targets will face a fine of AED 100,000 for the first violation.
  • Violating the Emiratisation for two consecutive years will lead to an increase in the penalty amount up to AED 300,000.
  • For the subsequent violation, the penalty will go up to AED 500,000.
  • Other penalties include participation bans in government tenders, license cancellation, and work permit suspension.
  • Companies involved with fake Emiratisation can face a fine of AED 20,000 to AED 100,000 per employee.
  • A minimum fine of AED 6,000 per month will be charged for each Emirati not hired. By 2026, this amount will be increased by AED 1,000 per year.   

Conclusion

Historically, there has been observed an imbalance in the amount of local and expatriate workers in UAE-based industries and sectors. With Emiratisation, the UAE government has been able to diversify and grow its economy in a very short time while creating countless job opportunities for local talent in the region.

Emiratisation is a really ambitious plan that is contributing a lot to the UAE economy through human capital development. All public and private sector companies are expected to align their hiring practices with this vision.

Failing to do so may lead to hefty fines and other penalties like work permit/license suspension or cancellation.

So, make sure your business shows a proactive attitude regarding compliance with Emiratisation laws and regulations to avoid legal or financial risks.

Visit March Ellis today to explore exciting job opportunities and to get top-quality recruitment services in the UAE.