The new mandatory unemployment insurance scheme announced by the UAE government will provide workers with peace of mind and attract the best talents to the region, according to local experts.

Earlier this month, a federal law was announced which makes it mandatory for employees to have an unemployment support insurance in both the private and public sectors starting January 2023. This will provide workers, who lose their jobs under unforeseen circumstances, cash support every month for a limited period until they find an alternative.

The redundancy payment will enable insured workers who suddenly lose their jobs to retrieve 60 per cent of their basic salaries with a maximum amount of Dh20,000 per month. The insurance package will cost workers an amount that ranges from Dh40 to Dh100 annually. However, employees will have the option to apply for higher insurance packages.

It has not been specified how the insurance scheme will be rolled out or whether employers have to assist their employees in applying for the programme. However, experts are sure it will have far-reaching effects.