Categories: HighlightsNews

New company classifications in UAE has come into effect starting June 1, 2022

The UAE’s Ministry of Human Resources and Emiratisation (MOHRE) has announced a new categorization system for businesses in the UAE, with three levels of classification. Companies will be classified based on their compliance not just with UAE labour laws but also with programs designed to make the UAE’s workforce more competitive and culturally diverse. The classifications are based on Cabinet Resolution No. 18 of 2022, “Concerning Classification of Private Sector Establishments Subject to Labor Relations Regulation Law Provisions.”

The firms will be classified using an automated system that allows for transparent changes to a company’s categorization based on the operations it performs or the transactions it conducts. According to state news outlet WAM, the categorization offers enterprises advantages and exemptions under national economic goals and Emiratisation programs.

Dr. Abdulrahman Al Awar, Minister of Human Resources and Emiratisation, talked about how firms can be promoted to the first category if they satisfy at least one of the criteria. These include increasing their Emiratisation rate by at least three times the target; cooperating with the “Nafis” program to train at least 500 citizens annually; being a venture owned by a young citizen in accordance with approved standards; being one of the training and employment centres that support the Workforce Planning Policy by promoting cultural diversity or being active in the targeted sectors and activities determined by the Council.

The firms will be classified using an automated system that allows for transparent changes to a company’s categorization based on the operations it performs or the transactions it conducts

Through the new federal law on unemployment insurance, as well as the decision to raise current Emiratisation rates by 2% annually for skilled jobs in private sector companies with 50 or more employees, the UAE’s legislative system related to the labor market and Emiratisation has seen the adoption of several decisions that help business development and support the Emiratisation of national capacities and the protection of workers and employees.

The ministry’s measures will assist strategic economic security in the medium and long term. They also improve the economy’s ability to attract global competencies and skills, as well as launch new economic sectors that contribute to diversifying sources of income while also protecting workers and laying the groundwork for a flexible business environment that responds to global changes and transformations, resulting in a more sustainable and diversified economy.