The Ministry of Human Resources and Emiratisation started, the day before yesterday, activating the new classification system for private sector establishments subject to the provisions of the Law Regulating Labor Relations, in implementation of Cabinet Resolution No. (18) of 2022, and the accompanying ministerial decisions, which divided private employers into three basic categories. , with the aim of responding to the requirements of business owners, protecting workers' rights, encouraging innovation and increasing small and medium-sized enterprises.
This system is part of a package of decisions aimed at developing businesses, supporting the employment of national cadres, and raising the current Emiratisation rates at an average of 2% annually for skilled jobs in private sector establishments with 50 or more employees, and achieving an increase rate of 10% in each facility by 2026.
According to a reading conducted by "Emirates Today" in the mechanisms and executive procedures related to the new facility classification system, five basic obligations have been identified that any facility or business entity wishing to avoid accountability or administrative and material violation, including "compliance with the laws regulating labor relations, and a system of protection wages, protection of labor rights, the policy of promoting cultural and demographic diversity in the country, and ministerial decisions regulating the labor market.
The new system automatically categorizes companies that fulfill the five obligations within the “second category”, to obtain privileges and discounts on service fees for work permits and transfer fees, amounting to 1,200 dirhams for a work permit for two years, with exemption from these fees when employing state and GCC nationals. Gulf Cooperation.
The new classification system defines six criteria that enable companies to upgrade their status to the “first category” once one of them is met, in the forefront of which is “the establishment, which has no fewer than 50 employees, raises its Emiratisation rate (set at 2% annually) by at least three times more than the target”, which means that the minimum promotion for a facility that adheres to this standard is to localize four skilled jobs annually, instead of one job annually for a facility that employs 50 employees, provided that the number of jobs allocated to citizens increases by increasing the number of workers in the facility (if the facility includes 100 workers, according to this criterion, the minimum for Emiratisation is eight jobs annually).
The rest of the promotion criteria include “cooperating with the (NAFES) program to train at least 500 citizens annually, that the facility be one of the projects of young citizens within the approved criteria in this regard, that it be within the training and employment centers that support the implementation of the workforce planning policy by promoting cultural diversity. In the state, it must be within the targeted sectors and activities as determined by the Council of Ministers based on the proposal of the Minister of Human Resources and Emiratisation, that it be among the establishments affiliated with the Higher Corporation for Specialized Economic Zones.
The system automatically assigned the “third category” of classification to companies and establishments that do not adhere to the standards regulating the labor market, protect labor rights or promote cultural and demographic diversity in the country’s labor market, and in violation of the Labor Relations Regulation Law, to be deprived of any privileges or facilities.
Incentives and exemptions
Raising the classification of companies to the “first category” is beneficial to them, both in terms of government sector companies’ dealings with them in government tenders, or in terms of obtaining special incentives and exemptions, in addition to saving approximately 1,000 dirhams in service fees for work permits and transfer fees, which It will not exceed 250 dirhams for a period of two years for companies classified in the first category, instead of 1200 for companies classified in the second category.