UAE Employment Visa: Dh60 Insurance to Replace Dh3,000 Bank Guarantee

The system came into effect from 15-October 2018.

■ New insurance policy replaces existing bank guarantee system
■ Insurance scheme costs Dh63 annually and 126 for two years, providing Dh20,000 coverage per worker
■ For private workers, It covers their end-of-service benefits, vacation allowance, overtime allowance, unpaid wages, worker’s return ticket and cases of work injury.
For domestic workers, the policy covers the cost of replacing the worker in cases of interruption of work, health inefficiencies, or the domestic worker's desire to cancel the work relationship, in addition to the unpaid wages and the worker's end of service benefits, vacation allowance and overtime allowance if not paid by the employer,  a return ticket to his country as well as work injury cases.
The insurance document for domestic workers will be issued upon submitting applications through either Tasheel or Tadbeer service centres.

Establishments registered with the ministry will have two options:
Buy insurance that can be issued immediately when typing the work permit application at Tasheel or other establishments that can complete their own applications using the Tasheel e-service.

 Submit a Dh3,000 bank guarantee on behalf of the employee, as per the rules and regulations of the current bank guarantee system 
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The new insurance scheme will cover up to Dh20,000 per worker in financial claims. The policy will be considered the first of its kind in the world which guarantees worker's pay in the private and domestic sectors.       

The newly created scheme secures workers' rights in the private sector and reduces the burdens on employers. 
The insurance policy, as per the new system, covers the workers’ end of service benefits, vacation allowance, overtime allowance, unpaid wages, return air ticket and cases of work injury, in which the insurance coverage amounts to Dh20,000 a person.

Those who wish to hire labourers have the choice of either purchasing an insurance document along with the two-year work permit which will cost Dh60 per year, or to pay a bank guarantee of Dh3,000 for each worker, as per the old system. The reimbursement will not apply to companies that have committed salary-related violations six months before renewing work permits.

This came after the ministry met with insurance providers represented by Dubai Insurance Company. The providers will issue electronic insurance documents for companies in the private sector as well as workers registered in the ministry. 

How to Refund Existing Bank Guarantee The bank guarantees will be refunded to establishments when cancelling work permits of workers covered by these guarantees or when purchasing the insurance policy upon renewal of the employee’s work permit, on the condition that the establishment has not committed violations related to non-payment of salaries during the last six months before the renewal of the expired permit.
Dubai Insurance Company will issue the policies electronically through a group of insurance firms.
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