New GCC rules for employers, Part 2 (UAE)
This is the second in our series of GCC updates, focusing on new developments in UAE immigration, personal data and Emiratisation rules.
New Visa Types
At the start of the COVID-19 pandemic, a number of UAE businesses had employees who returned to their home country or simply relocated overseas to continue working remotely during periods of lockdown. In light of the ease with which many employees in the UAE were able to work remotely, we have seen an increasing number of requests from those wanting to live and work in one country for the benefit of a company in another. Many employers in the UAE have agreed to, or are considering, overseas remote working arrangements, primarily as a means of hiring or retaining the talent they need, and this has now been recognised by the immigration authorities in the UAE with the availability of a number of new visas, including:
– Green visa – This visa allows holders to sponsor themselves for five years, thus eliminating the need for a UAE national or employer to sponsor their visa. Under the provision of this visa, individuals may also sponsor family members, including spouses, children and first-degree relatives. The residency given to family members will be the same as that of the original visa holder. There is also now a longer grace period of six months for individuals under this visa to stay in the UAE after the residence permit is cancelled or expires.
– Freelancer visa – This is a new federal visa for self-employed workers that was announced along with the green visa. It is the first federal scheme of its kind and enables the self-employed to sponsor themselves. Self-employed workers based in the UAE and overseas in specialised fields such as artificial intelligence, blockchain and digital currencies will be eligible to apply.
– Temporary work visa – Those who have a temporary work assignment, such as project-based work or probation testing, can apply for this visa. Applicants will need to submit a temporary work contract or a letter from their employer as well as proof of fitness.
– Job exploration entry visa – This visa does not require a sponsor or a host. It is granted to those classified in the first or second or third skill level by the MoHRE, or a graduate from one of the best 500 universities in the world according to a classification approved by the Ministry of Education. The holder must have graduated within the last 2 years. The minimum educational level is a Bachelor’s degree or equivalent. The individual must also satisfy a prescribed financial guarantee.
New Emiratisation rules
The UAE has introduced a new federal rule that imposes significant fines on onshore companies within the private sector that fail to employ a sufficient number of UAE nationals. The aim of this reform is to increase the number of Emiratis working in the private sector. The UAE government has previously introduced an Emiratisation policy for the private sector (onshore UAE only), which put in place certain obligations for employers to recruit UAE nationals up to certain quotas for most business sectors and certain job categories. In addition, as part of the Emiratisation policy, the UAE government provided incentives for those employers onshore that strictly observe their applicable Emiratisation requirements, by allowing them more streamlined immigration processing, lower government fees (including an exemption from depositing bank guarantees), as well as other incentives. As of January 1, employers are now required to employ one skilled UAE national if their workforce consists of 49-50 expatriate employees, and two skilled UAE nationals if the entity employs 51-100 expatriates. In addition, Ministerial Resolution No. 279 of 2022 requires onshore companies to increase the number of employed Emiratis by 2% per year with the aim of reaching 10% by 2026.
The main underlying risk for employers is that if they do not achieve the Emiratisation thresholds, they will be required to pay a monthly fine of AED6,000 for every UAE national they have failed to employ prior to the deadline. The employer would also be unable to issue or renew work permits until the minimum threshold is achieved.
New UAE Data Protection Law
The UAE has issued Federal Decree Law No. 45 of 2021 (the UAE Data Protection Law) to regulate the collection and processing of personal data in the country. While the law was enacted on January 2 last year it has yet to be implemented fully and further regulations that will clarify various aspects (including the scope and level of sanctions) are due to be published later in 2023. Following the implementation of these regulations, controllers and processors will then have six months in which to adjust their status and comply with the UAE Data Protection Law.
In our experience, HR is often the area of the business that tends to process the most sensitive data, which is employee data. This can include health information, equal opportunities data, financial information and bank account details. With the introduction and enforcement of the UAE Data Protection Law, HR teams have a key role to play when it comes to data protection compliance and so must ensure they are fully aware of the rights held by their employees when assessing the data being retained. Employers will need to understand the types of personal data held about their employees, how and why it is collected and stored, how long it should ideally be retained for, any third parties to whom it is transferred and the safeguards that are in place to protect it. Consideration will therefore need to be given as to what changes to employment documentation may be necessary. Consent and justification for processing employee data are at the forefront of the issues for consideration.