Emiratisation Law: Empowering UAE Nationals and Driving Workforce Diversity

The Emiratisation Law by the UAE government is a pioneering effort to boost the involvement of Emirati citizens in the private sector. This innovative law is a key component of the NAFIS program, which focuses on improving the competitiveness and capabilities of Emirati human resources in the private sector.

Understanding Emiratisation Law:
Emiratisation law in Dubai is all about giving the locals a fair chance of securing employment in the private sector. To achieve this noble goal, certain targets have been set by the Ministry of Human Resources and Emiratisation (MoHRE).Emiratisation is a commitment to ensure that UAE-based private sector companies prioritize employing UAE nationals, thereby balancing the workforce's demographic makeup. It's an essential component of the NAFIS program, which seeks to strengthen Emirati human resources' abilities in the private sector.

Emiratisation Targets:

To achieve its goals, the Emiratisation Law sets specific targets based on company size. Private-sector businesses with more than 50 employees are required to have a minimum of 3% of their skilled workforce comprised of UAE nationals. Moreover, small businesses with 20 to 49 employees are now included in this mandate. As per the Ministry of Human Resources and Emiratisation (MOHRE), starting from January 1, 2024, these small businesses will be required to hire at least 1 Emirati employee. A small step towards enhancing Emirati employment in various sectors.There has been no confirmation yet if the same exemption will apply to companies with 20 to 49 employees in free zones.

Penalties for Non-compliance:

To encourage compliance, the law imposes penalties on companies that don't meet these targets. Penalties increase with repeated non-compliance. These strict measures underscore the government's commitment to creating job opportunities for UAE nationals.
For Instance If these companies fail to employ an Emirati in 2024, they will be served a fine of 96,000 Dirhams. For those businesses that ignore the targets and don't hire two Emiratis by 2025, the fine will climb to a whopping 108,000 Dirhams.

Benefits of NAFIS Scheme:
Employers supporting the NAFIS scheme enjoy several benefits. Notably, they receive a reduction in employer pension contributions for UAE nationals. Moreover, employers can contribute up to AED 8,000 towards the salary of each UAE national employed under the NAFIS scheme. Exceptional private-sector establishments may even be eligible for the prestigious NAFIS Award which recognizes their contribution to the economy.

Expansion of Emiratisation Targets:

A recent update to Emiratisation rules brings in fold companies across 14 economic sectors including property, education, construction and health care.Firms must gradually increase the percentage of Emirati employees every half year. The Emirati employment rate is predicted to reach 6% in 2024, 8% in 2025, and 10% in 2026. Failure to follow these regulations might result in substantial fines, increasing the pressure on companies to participate in this transformative initiative.

Impacted Sectors:

The Emiratisation Law is impacting numerous sectors across the UAE, including information and communications, financial activities, real estate, professional and technical activities, administrative and support services, arts and entertainment, mining and quarrying, transformative industries, education, healthcare, construction, wholesale and retail, transportation and warehousing, and hospitality and residency services. These sectors are undergoing significant changes to support the integration of UAE nationals.

Conclusion:

The Emiratisation Law is a significant step towards creating more job opportunities for UAE nationals and fostering a diverse and inclusive workforce. By establishing specific targets and penalties and introducing the NAFIS scheme, the UAE government is actively promoting the professional growth of its citizens. The recent inclusion of small businesses in the Emiratisation initiative underlines the government's commitment to transforming the employment landscape. This expansion is a fantastic opportunity for small businesses to contribute to the development and growth of the UAE.Through these efforts, the UAE is empowering its citizens and contributing to its long-term economic growth.