Effective immediately, private-sector companies in the UAE must purchase government-approved insurance for every new employee before obtaining a work permit, Gulf News reported on 23 July 2026. The Ministry of Human Resources & Emiratisation (MoHRE) says the scheme guarantees unpaid wages and end-of-service dues of up to AED 20,000 over a 30-month period if an employer defaults. Recruitment costs, government fees and the insurance premium itself must be borne entirely by the employer—explicitly prohibiting cost-sharing with workers. The policy replaces the previous bank-guarantee model, freeing up corporate cash but imposing an annual premium (about AED 120 per worker) that mobility and finance teams must now budget for at the offer-letter stage. Failure to secure the policy will block issuance or renewal of labour cards and could trigger fines. For multinational HR teams, the change simplifies off-boarding: insurance payouts cover repatriation tickets and, in the case of company insolvency, airfare for family dependants. However, assignee cost-projections should be updated, and vendors re-contracted to reflect the new compliance step. MoHRE argues the system strengthens the UAE’s reputation as a fair-labour destination and should reduce disputes clogging labour courts, noting that more than 7 million workers have already been brought under the scheme since pilot launch in 2022.
Source: Gulf News
