ILOE insurance: ILOE, explained for
the people who get asked.

What is ILOE?

ILOE stands for Involuntary Loss of Employment. It is a compulsory insurance scheme, introduced by Federal Decree-Law No. 13 of 2022, that pays an employee a share of their salary for a limited time if they lose their job through no fault of their own.

Who has to enrol in ILOE?

Employees in the private sector and the federal government, UAE nationals and residents alike. Subscribing is the employee's own obligation. The employer is not required to pay the premium, though some choose to. For what the employer does have to provide, see UAE employee insurance.

• Not covered: investors and business owners who own and manage their own company
• Not covered: domestic workers
• Not covered: employees on temporary contracts
• Not covered: juveniles under 18
• Not covered: retirees who receive a pension and have taken up new work

What are the two ILOE categories?

What does ILOE pay out?

Sixty per cent of the basic salary over the six months before the job was lost, up to the monthly limit for the category, for a maximum of three months for each claim.

Sixty per cent of basic salary is how MOHRE described the benefit when the scheme opened; the UAE Government portal now says 60 per cent of the subscription salary, so check the base on a specific claim with the insurer.

Who can claim, and what stops a claim?

HR is usually asked this on the day someone leaves. The UAE Government portal sets these conditions:

• At least twelve consecutive months of subscription, with every premium paid on the schedule chosen
• The job ended for a reason other than resignation
• No dismissal for disciplinary reasons
• No open work absence complaint against the employee
• The job loss did not come from a strike or non-peaceful protest
• The claim is not based on fraud, and the employer is not fictitious
• The employee is in the country

Payment is suspended if the person finds a new job during the three months. MOHRE also said at launch that the right to claim is lost on leaving the country.

How does an employee subscribe and claim?

The UAE Government portal lists nine channels for subscribing and paying, including the ILOE website and app, business service centres, exchange houses and some banks' apps. MOHRE said at launch that premiums could be paid monthly, quarterly, every six months or yearly, so check which options the scheme offers today. A worker on commission whose contract defines no basic salary can choose either category.

A claim goes to the insurer within 30 days of the end of the employment, or of the end of a labour dispute over it, and the portal says payment follows within two weeks of the claim. For someone leaving the company, that 30-day limit is worth mentioning at exit.

What is the fine for not subscribing?

An employee who has not subscribed faces a fine of AED 400, and one who subscribed but does not pay the premiums is fined AED 400 too. Both fines are charged to the employee, but an unpaid fine can stand in the way of a new work permit, which is how it becomes the employer's problem at the next renewal.

What should HR track for ILOE?

• Each employee's status: enrolled, not enrolled or exempt
• The expiry date of each policy, since a lapsed policy breaks the twelve months of continuous cover
• The right category when a basic salary crosses AED 16,000
• New joiners, who are easy to miss in their first months