Recent Measures for Emirati Employment in Small Businesses
The Ministry of Human Resources and Emiratisation (MohRE) in the United Arab Emirates has recently introduced new requirements aimed at promoting Emiratisation and increasing the participation of Emirati citizens in the private sector in Dubai and across the Emirates. Companies with 20 to 49 employees will now be required to hire at least one Emirati citizen by 2024 and another by 2025 (previously, only companies with over 50 employees were affected).
These expanded Emiratisation requirements open up new career prospects for Emirati graduates within small businesses. They underscore the UAE’s ongoing commitment to strengthening the presence of Emirati citizens in the job market and promoting a diversified and balanced economy. Emiratisation plays a crucial role in reducing dependence on foreign labor and actively contributes to enhancing the overall national economy by fostering the development of local skills.
Expansion of Emiratisation Requirements in the Private Sector in the UAE
As mentioned earlier, before 2023, only companies in the United Arab Emirates with 50 or more employees were required to meet Emiratisation hiring targets. However, these requirements have been expanded to now include private businesses in 14 sectors, such as real estate, education, construction, and healthcare. The aim of this expansion is to encourage greater business participation in the Emiratisation initiative, thereby promoting the employment of Emirati citizens.
This significant development means that all businesses in the United Arab Emirates (UAE) will now be obligated to employ at least one Emirati citizen. Emiratisation goals thus offer new perspectives and opportunities for Emirati graduates, particularly within startups and small to medium-sized enterprises (SMEs). By working in these dynamic environments, they can acquire valuable skills, develop their talents, and actively contribute to the growth of these businesses. Therefore, this reform significantly strengthens the pivotal role of Emiratis in the entrepreneurial landscape while fostering their professional development and stimulating innovation within the private sector.
What You Risk in Case of Non-Compliance with MoHRE’s New Requirements
Companies with 20 to 49 employees that fail to meet the obligation of hiring at least one Emirati by 2024 will be subject to a fine of AED 96,000 (USD 26,000). Furthermore, those not fulfilling the requirement to employ two Emiratis by 2025 will face an increased fine of AED 108,000 (USD 30,000). It is yet to be determined whether the previous exemption granted to free zone businesses, with 50 or more employees, will be extended to businesses with 20 to 49 employees.
Various sectors are affected by this new regulation, including information and communications, financial and insurance activities, real estate, professional and technical activities, administrative and support services, arts and entertainment, mining and quarrying, manufacturing industries, education, healthcare and social services, construction, wholesale and retail trade, transportation and storage, as well as hospitality and residency services.
These measures aim to encourage Emiratis to hold qualified positions in the private sector and are part of the ongoing Emiratisation campaign led by Dr. Abdulrahman Al Awar, the Minister of Human Resources and Emiratisation, within the UAE’s “We the UAE 2031” strategy, outlining the country’s development path for the next decade.
To meet the set targets, private sector companies with a workforce of 50 employees or more were required to ensure that 3% of their staff comprised Emiratis by July 2023. Additionally, it was previously announced that companies should incrementally increase the proportion of Emirati employees by 1% every six months, with targets of 4% by the end of the year, 6% by the end of 2024, 8% the following year, and 10% by the end of 2026.
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