UAE Emiratisation Rule 2024 Update: More Representation to be Expected in Small Firms
The United Arab Emirates has introduced a new Emiratisation rule for companies employing between 20 and 49 staff members. This important change aims to reinforce the local workforce and support economic inclusivity. Effective immediately, these firms are required to have at least one Emirati national among their employees.
This initiative has been an essential component of labor policies in the UAE for decades, focusing on increasing the presence of Emirati nationals in the private sector. Historically, the emphasis has been on large corporations and strategic sectors such as telecommunications, government-related entities, and banking.
However, the new regulation extends this mandate to smaller companies, ensuring a more inclusive approach to national employment objectives. The new policy specifically targets 14 key sectors, including real estate, finance, insurance, healthcare, IT, and communication and others, where such employment opportunities might traditionally be limited.
To facilitate compliance and support companies in meeting the new requirements, the UAE government is expected to provide guidance, resources, and incentives through the Ministry of Human Resources and Emiratisation (MoHRE). These could include subsidies for Emirati salaries and training programs tailored to the needs of smaller companies.
The MoHRE will also monitor and ensure compliance through inspections and penalise breaches. Companies that do not comply will face a fine of AED 100,000 for the first violation. Continued non-compliance for two consecutive years will lead to an increase in the penalty amount up to AED 300,000. Other sanctions include bans on participation in government tenders, license cancellations, and work permit suspensions. Companies involved in fake Emiratisation can face fines ranging from AED 20,000 to AED 100,000 per employee. A minimum fine of AED 6,000 will be charged for each Emirati not hired, increasing by AED 1,000 per year starting in 2026.
Larger companies should be reminded, if the number of workers falls between 51-100, a minimum of two Emirati employees in the workforce is mandated. If the business has 101-150 skilled employees, it must hire a minimum of three Emiratis. If the total workforce exceeds 151, the business needs to hire one Emirati for every 50 workers.
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