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30 June, 2022

MOHRE Announces New Company Classification System in June

A new classification system for companies in the private sector took effect earlier this month, under the systems of Ministry of Human Resources and Emiratization (MOHRE). 


The new system, which classifies companies into three categories, depends on the extent of companies’ compliance with the law and Wage Protection System, workers’ rights protection and their compliance with the policy of promoting cultural and demographic diversity. 


Dr Abdulrahman Al Awar, Minister of Human Resources and Emiratization, told a media briefing that the ministry will continually support UAE’s efforts in achieving global leadership in business while supporting key national objectives, with a primary focus on promoting Emiratization programmes and empowering UAE talents. 


According to the ministry, the Emiratisation rate is two per cent annually from high-skilled jobs in establishments that employ 50 workers or more, until achieving the 10 per cent target by 2026. 


Companies in the first category need to meet at least one criterion in the new system. The criteria include  

  • Raising the company’s Emiratization rate at least three times above the target 
  • Cooperation with the ‘Nafis’ programme (federal programme to increase the competitiveness of Emirati human resources and empower them to occupy jobs in the private sector) to train at least 500 Emiratis annually; or being a venture owned by a young citizen according to approved standards in this regards.  
  • Other criteria are being one of the training and employment centers 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 cabinet. 


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. Companies that show a lack of commitment to protecting workers’ rights or not promoting cultural and demographic diversity in the UAE labour market will be in category three. 


The classification offers rewarding incentives to companies that commit to the prescribed laws and policies on promoting cultural and demographic diversity, in line with the UAE society’s values, which are based on tolerance and equal opportunities for all. 


The decision to raise annual Emiratization levels in private sector companies is accompanied by unprecedented advantages, including reducing the fees of the Ministry of Human Resources and Emiratization by up to 80% for private sector companies for achievements in hiring and training citizens in partnership with the Nafis programme. 


To know more about how this classification affects labour costs for your business, do get in touch with us 

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