Home Legal Huge Fines imposed for Circumventing Emiratisation Targets

Huge Fines imposed for Circumventing Emiratisation Targets

Up to AED500,000 fines for companies who alter figures or reduce employee numbers in order to fudge the numbers.

The Ministry of Human Resources and Emiratisation (MoHRE) has announced that fines of up to AED500,000 will be imposed on companies that circumvent the Emiratisation targets. This comes in line with the implementation of UAE Cabinet Resolution No. 44 of 2023 regarding amendment of provisions of the Cabinet Resolution No. 95 of 2022 on violations and administrative penalties related to the initiatives and programmes of the Emirati Talent Competitiveness Council (Nafis).

The violations include reducing the number of employees or modifying their classification or any other method to circumvent the Emiratisation targets, the Ministry said.

According to the resolution, a fine of AED100,000 will be imposed on companies that have been proved to circumvent the Emiratisation targets for the first time; if the violation is repeated for the second time, the fine imposed is AED300,000, while the third time violation will lead to a AED500,000 fine. Similar violations after the third time will result in a AED500,000 fine.

Any company found committing the violation will be obligated to achieve the required Emiratisation targets based on its actual status before the circumvention.

The Cabinet resolutions regarding Emiratisation targets require companies with 50 employees or more to increase the number of its Emirati employees at skilled jobs by 1% every six months, ultimately achieving a 2% Emiratisation by the end of the year. Targeted companies are expected to achieve a 10% Emiratisation rate by the end of 2026.

Non-compliant companies will face a AED42,000 financial contribution for each Emirati not appointed according to the semi-annual targets.