Here is a complete guide to the resolution

The UAE has announced a new resolution regarding bank guarantees from employers and employees’ protection insurance scheme for the companies operating in the private sector.

The new law protects employees in the event of an employer becomes insolvent and fails to pay end-of-service commitments to the employee.

Libbie Burtinshaw, operations manager at company service provider PRO Partner Group, shares the details of the new resolution and its impact on employees and employers.

Below is a complete guide to the new law.

What is the new resolution all about?

Dr Abdulrahman Al Awar, Minister of Human Resources and Emiratisation, has issued the Ministerial Resolution No. 318 of 2022 regarding bank guarantees and employees' protection insurance scheme in the private sector.

What has changed in the new law?

Under the previous law, the company was required to put down a deposit of Dh3,000 per employee to ensure that the employer made provision for the end-of-service benefit for each employee. This new ministerial resolution further clarifies this option to ensure that the rights and benefits of employees are protected. Private companies can now pay a yearly sum directly to the local bank for each employee or pay monthly instalments under an individual insurance policy per employee.

Are there multiple options for employers?

Employers have two options. Under the first option, an employer can provide a bank guarantee of Dh3,000 for each...

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