In a bid to attract more citizens into the private sector, the United Arab Emirates is considering making changes to its labor laws.
The UAE’s public sector employs a large number of Emiratis, but any fall in oil prices may put severe pressure on the government expenditure. Emiratis prefer to work in the public sector because it offers shorter working hours, longer holidays and a higher pay. Therefore, many analysts view the Emiratization drive to be a burden on companies and a costly solution to providing locals with more jobs. On the other hand, most of the foreign workers take up jobs in the private sector.
A dip in oil prices may spur political discontent and downturn in the economy. As a result, the UAE leaders are considering preemptive measures to avert any adverse situation by rebalancing their employment structures. Labor Minister Saqr Ghobash is expected to soon brief the government about current labor law, including proposals of aligning private and public sector salaries, and increasing private sector holidays.
About ninety percent of UAE population is based on foreign workers. The oil-rich emirate offers UAE citizens generous benefits, including free government education, health care and assistance in housing. Government figures suggest that about 14 percent of Emiratis are jobless, but the government is taking active measures to reduce this rate.
Last year, the UAE government announced heavy fines of up to Dh20,000 every time a company was found guilty of violating Emiratization rules. The labor laws included 20 sanctions for breaches and included wage delays, providing improper housing for workers and forcing them to pay for their labor permits, not reporting an absconding worker and making false reports about absconding workers. With the government taking measures to ensure enough jobs are made available for locals in the private and public sector, the penalties were aimed at reducing the instances of “ghost” Emiratization in the private sector.