UAE - Insurance to replace bank guarantees for workers
Thursday, 06 14 2018, Category: Insurance and Reinsurance, Country: U.A.E
Sheikh Mohammed bin Rashid, Prime Minister and Ruler of Dubai, announced new legislation approved by the UAE cabinet which includes doing away with bank guarantees for the recruitment of labour in the private sector, creating a Dh14 billion stimulus for the economy and lowering the cost of doing business in the country.
The Cabinet approved the adoption of a "low-cost insurance" system as an alternative to the monetary guarantee provided by employers, which costs Dh3,000 per worker. In contrast, the insurance will be priced at Dh60 per year per employee. The insurance policy in the new system covers the workers’ end of service benefits, vacation allowance, overtime allowance, unpaid wages, return air ticket and cases of work injury, in which the insurance coverage amounts to Dh20,000 a person. The scheme is aimed at securing workers’ rights in the private sector and reducing the burden on employers, allowing businesses to recover about Dh14 billion in guarantees, freeing up capital for other purposes such as reinvestment.
Source: The National – UAE