Starting June 1, 2022, the UAE’s Ministry of Human Resources and Emiratisation (MoHRE) will implement a new classification system for private sector companies on the basis of their compliance with directives. The system classifies companies into three categories: first, second, and third. Companies are classified in line with their adherence to laws and decisions that regulate the business environment, protection of labour rights, commitment to the wage protection system, along with their alignment with UAE’s policy on promoting cultural and demographic diversity.
First Category (TIER 1)
The first category will cover companies and establishments that commit to the laws and decisions that regulate the labour market while fulfilling all required general obligations. They must also meet at least one of the following criteria:
- raising their Emiratisation rate at least three times above the target,
- cooperating with the ‘Nafis’ program to train at least 500 citizens annually,
- being a venture owned by a young citizen according to approved standards,
- being one of the training and employment centres that support implementing the Workforce Planning Policy by promoting cultural diversity in the UAE.
Second Category (TIER 2)
The second category will encompass companies that commit to general standards, laws and regulations, and to the UAE’s policy on promoting cultural and demographic diversity, or operating within the targeted sectors and activities determined by the Council of Ministers based on the Minister of Human Resources and Emiratisation’s proposal. Companies that do not meet any of these criteria, while complying with the laws and the UAE’s policy on promoting cultural and demographic diversity, will be automatically classified in the second category.
Third Category (TIER 3)
The third category will comprise companies that fail to observe the policies, laws and decisions on regulating the labour market or standards that protect labour rights, or companies that do not commit to the policy on promoting cultural and demographic diversity in the UAE’s labour market.
The classification sets new fees for services tied to the choices employers make. The classification will be accompanied by updates on service fees for work permits and transfer fees in line with the classifications of companies.
For Tier 1 companies, fees will not exceed AED 250 for two years, while Tier 2 companies will be charged AED 1,200 for two years. Tier 3 companies will not be able to benefit from any fee rebates, and the fees for issuing or renewing work permits will amount to AED 3,450 for two years.
HR Chronicle is the Leading HR and Payroll Management software in the UAE Region. HR Chronicle is fully compliant with GCC country rules out of the box.
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