Private sector firms to face fines for failing to hit Emiratisation targets from January 1

Sheikh Mansour bin Zayed and Sheikh Abdullah bin Zayed chair the National Competitiveness Council. New figures show 50,000 Emiratis now work in the UAE's private sector - a rise of more than 28,000 in one year. Photo: UAE Government Media Office

As of January 2023, companies in the UAE must ensure that 2 per cent of their workforce is Emirati. This will rise by 1 per cent every six months until it is 10 per cent. Freezone companies are exempt. Christopher Pike / Bloomberg

Semi-government owned companies such as Strata, which makes aircraft parts, are major employers of Emiratis. The government wants more privately-owned companies to hire Emiratis. Photo: Mubadala

Dr Abdulrahman Al Awar, Minister of Human Resources and Emiratisation, said a greater mix of Emiratis and foreign talent will make the country more competitive. Victor Besa / The National

Young Emiratis are being urged to look to the private sector for opportunities and away from traditional jobs in government. Satish Kumar / The National

Authorities have reiterated that private sector companies which fail to hit Emiratisation targets for this year will face substantial fines from January 1.

The Ministry of Human Resources and Emiratisation on Thursday said businesses with at least 50 employees must ensure that 2 per cent of their workforce is made up of Emiratis to avoid stiff financial penalties.

The new law does not apply to companies registered in free zones, although they are being encouraged to hire Emiratis.

Employers that fail to reach the 2 per cent target by the end of the year will have to pay a Dh72,000 fine ($19,602) in January for each Emirati worker they fail to hire, equivalent to Dh6,000 a month for the year.

This target will rise to 4 per cent by the end of 2023, 6 per cent in 2024, 8 per cent in 2025 and 10 per cent in 2026.

The government is determined to increase local participation in the private sector, saying it remains central to the economic prosperity of the country.

Fines for failing to reach Emiratisation staffing goals will increase by Dh12,000 each year.

Employers that fail to reach the 4 per cent mark in 2023 will pay Dh84,000 for each Emirati not hired, with this figure rising to Dh120,000 per worker for 2026.

“We aim to achieve an effective participation of the private sector in the development process of the UAE, as raising the participation of Emiratis in this sector will have a positive impact on the competitiveness, attractiveness, and stability of the business environment in the country,” said the Ministry statement on Thursday.

“We will continue to activate the partnership between the government and the private sectors on Emiratisation, based on our belief that Emiratis can make a positive impact within the vital economic sectors, as well as our aspiration to advance the growth of the private sector companies and improve their ability to keep pace with successive developments locally and globally.”

The Ministry said that legislation governing Emiratisation will contribute to “strengthening the diversification of the labour market and will consolidate the UAE’s position as an incubator of national and international talents and an ideal destination to work, live and invest.”

It praised those companies that have met Emiratisation requirements for 2022.

“Now, we look forward to witnessing a greater impact in 2023, as the Emiratisation targets will increase by 2 per cent until 2026, resulting in a growth by 10 per cent of Emirati skilled employees,” it said.

Policy will bring about 'fundamental change'

Abdulrahman Al Awar, Minister of Human Resources and Emiratisation, this month held talks with leading recruitment agencies to emphasise the positive role Emiratis can play in private companies.

Dr Al Awar met senior officials from 66 companies, including those offering temporary employment and labour supply services.

“The labour market in the UAE is entering a new phase that focuses on the central role of national human capital within the private sector,” the minister said.

“The Emirati skilled employees, who constitute most Emirati employees registered within the ministry’s system, are proving their positive effects on the economy.

“We are on the verge of fundamental changes in the country's labour market in line with increasing the participation of citizens and improving the competitiveness of the local business environment.