Page 255 - Ministry of Economy - December 2017

12/26/2017 Explained: Changes to the UAE’s worker classification system - Gulf Business
Recent changes

The end of 2017 will see further changes to the classification of companies in the mainland as an additional sub-
category D has been introduced and the MOHRE has announced that more attention will be given towards the
recognition of employee qualifications. This is expected to play a significant role in the assessment of companies
operating in the UAE mainland and the way the benefits, including exemption from bank guarantees, are applied.

According to the new law, which was expected to come into force at the end of November, companies that
employ skilled workers will be offered lower governmental fees for the issuance of new work permits and for the
renewal of work permits for existing employees.
Companies classified as 2-B, for example, will pay only Dhs1,000 for a work permit for a worker with
qualifications, compared to Dhs2,200 ($600) for unskilled workers. Currently, Dhs1,500 ($408) must be paid per
employee regardless of their qualifications.

Those in the new sub-category D will pay the highest fees for a work permit in the second category – Dhs2,000
($545) or Dhs3,200 ($871) depending on qualifications – while companies classified as 3 will pay a standard fee
of Dhs5,000 ($1,361) regardless of worker qualifications.

The MOHRE recognises five professional levels of employees with levels 1 and 2 representing the most skilled
workers with a minimum of a university degree certificate, level 3 requiring a minimum of a high school diploma
and level 4 and 5 representing the least skilled workers with no degree requirements.

Moreover, the exemption from the obligatory bank guarantees will be extended from companies in category 1 to
categories 2 and 3 as long as workers with qualifications are hired. Bank guarantees will continue to be
mandatory for the recruitment of unskilled candidates and will be waived for category 1 regardless of employee
qualifications.

Favouring companies that prioritise skilled workers over candidates without qualifications is a large step closer to
creating a knowledge-based economy that relies on the best local and foreign talent. However, while the
discounted governmental fees will reduce the overall costs of recruitment, companies in the UAE should also
anticipate stricter implementation of various Emiratisation rules.
Increasing the number of Emiratis working in the private sector remains one of the key elements of the UAE’s
National Agenda. This was further reiterated during the recent UAE government Annual Meeting in Abu Dhabi,
where a number of initiatives were launched to support what is referred to as the ‘30 national pillars’. Among the
initiatives that aim at achieving goals of the national agenda, a qualitative Emiratisation programme was
announced.

While still very little light has been shed on this programme, it is expected that it will promote employment of
highly-skilled Emiratis in important positions within the private sector. This strategy will not only contribute to the
overall development of local expertise, but it will also impact the shape of the private sector in the UAE by
increasing workforce competitiveness.

Furthermore, private sector companies that offer flexible work conditions and training opportunities will be able to
encourage top UAE talent to shift from the public sector.

Employers in the UAE should therefore plan their recruitment strategies to ensure the employment of the right
talent and to accommodate the requirements of various Emiratisation policies in what becomes a more
challenging business landscape.

Marcin Kubarek is manager of knowledge and content at Fragomen

http://gulfbusiness.com/explained-changes-uaes-worker-classification-system/ 3/5