His Excellency Dr. Abdulrahman Abdulmannan Al Awar, UAE Minister of Human Resources and Emiratisation has announced the details of a new classification system for private companies according to Cabinet Resolution No. 18 of 2022, and its pertinent ministerial resolutions.
Three categories with top-level governance
H.E. Dr. Al Awar explained that the new classification of companies in the UAE, which will take effect on June 1, 2022, splits existing companies into three distinct categories. The classification criteria meet the clients' demands for simplifying transactions, with top-level governance supported by smart solutions provided by MOHRE's digital ecosystem. The companies will be categorised using an interactive automated system that allows changing a company's classification transparently, based on the procedures carried out by each company or the transactions undertaken.
The Minister noted that the classification provides incentives and exemptions for companies in accordance with the national economic priorities and Emiratisation programs, while boosting priority sectors. It also takes into account the value system on which any successful global economy must be based, namely equality and justice in employment opportunities, alongside promoting tolerance and inclusiveness, without inhibiting employers' freedom to choose the talents and competencies they wish to recruit. The classification sets new fees for services in a manner that is practically tied to the choices employers will make.
Clear criteria for the three categories
His Excellency Dr. Al Awar stated that the classification of new companies “depends on the extent of their commitment to the law and wage protection system, workers’ rights protection, and their compliance with the policy of promoting cultural and demographic diversity in the UAE, along with the resolutions that regulate the labour market. Most existing companies in the country that fulfil all these commitments will be in the second category.
Some companies will be promoted to the first category, and these companies will enjoy significant exemptions from fees based on their fulfilling various criteria. Meanwhile, the classification of other companies will drop to the third category in case of non-compliance with the policies, laws and resolutions regulating the labour market, he said.
H.E. discussed the criteria by which companies can promote to the first category, once they meet at least one criterion. These include raising their Emiratisation rate at least three times above the target, cooperating with the "Nafis" program to train at least 500 citizens annually, or being a venture owned by a young citizen according to approved standards in this regard, or being one of the training and employment centres that support implementing the Workforce Planning Policy by promoting cultural diversity in the UAE, or being active in the targeted sectors and activities determined by the Council of Ministers based on the proposal presented by MOHRE.
Companies that do not meet any of these criteria, while committing to the law and the policy of promoting cultural and demographic diversity in the UAE, will be automatically classified in the second category. The third category will encompass all other companies found by the Ministry to be violating Federal Law No. 33 of 2021 regarding the organisation of labour relations and its executive regulations, and the resolutions regulating the labour market, or standards for protecting labour rights, or lack of commitment to promoting cultural and demographic diversity in the UAE labour market.
Companies can also be classified in Tier 3 if they commit other violations stipulated in Ministerial Resolution No. 209 of 2022, including the issuance of a final ruling that the facility committed a crime of human trafficking, used or recruited workers without obtaining work permits, provided incorrect data, documents or information to the ministry, violated obligations on workers’ wages, housing and safety standards, resorted to fake Emiratisation practices, or committed other serious violations.
The classification will be accompanied with updates on service fees for work permits and transfer fees in line with the classifications of companies. Fees will not exceed AED 250 for Tier 1 companies for two years, while Tier 2 companies will be charged AED 1200 for two years. Tier 3 companies will not be able to benefit from any fee rebates, and the fees for issuing or renewing work permits will amount to AED 3450 for two years. The employment of UAE and GCC citizens is exempted from these fees.
You can read more about this announcement here.
