The Ministry of Human Resources and Emiratisation (MoHRE) in the UAE has increased its goal for hiring citizens, resulting in a decrease in the number of expatriates being hired by companies in the country.
The MoHRE in the UAE has set a goal of increasing the percentage of citizens employed in the private sector to 10 per cent by 2026.
In order to achieve this, the target for companies to hire citizens was set at 2 per cent in 2022, and has now been raised to 4 per cent in 2023. Companies that fail to meet this target will face financial penalties imposed by MoHRE.
Private companies in the UAE need to sustain a certain level of target based on the number of employees, under the Emiratisation rule.
The UAE’s Ministry of Human Resources and Emiratisation (MoHRE) has set a minimum quota for the percentage of citizens that must be employed in private companies.
For companies with 50 or fewer employees, at least one citizen must be employed.
For companies with more than 50 employees, at least 2 per cent of the workforce must be citizens.
This percentage will gradually increase to reach the target of 10 per cent Emiratisation.
The recent decision by the UAE cabinet to increase the percentage of citizens employed in the private sector, while intended to benefit locals, may have an unintended negative impact for both expatriates and companies in the country.
As companies are required to meet higher Emiratisation targets, they may have limited options for hiring and this may result in fewer employment opportunities for expats. Additionally, companies may also face challenges in finding suitable local talent, which may impact their business operations.
While the goal to increase the percentage of citizens employed in the private sector to 10 per cent by 2026 is being implemented, it may result in fewer employment opportunities for expatriates in the UAE. Companies that fail to meet the Emiratisation requirements will be subject to financial penalties, with a minimum fine of 6000 dirhams per month for each required citizen employee not hired.
Additionally, companies that do not comply with the target for two consecutive years will be downgraded to the third category under the classification law.