Government steps up scrutiny of employment ‘workarounds’

IMPACT – MEDIUM

What is the change? As part of a tougher approach on visa and immigration violations, the UAE has become more vigilant in looking for employment “workaround” arrangements.

What does the change mean? Companies who engage in the practice risk greater scrutiny by authorities and increased penalties.

• Implementation timeframe: Immediate and ongoing.
• Visas/permits affected: Residency visas and work permits.
• Who is affected:Companies not yet legally settled in the UAE that want to secure future employment of foreign nationals.
• Business impact: The increased scrutiny is a reminder to employersto strictly follow immigration and labor regulations.

Background: Companies that have not yet become legally established in the UAE may wish to secure future employees by arranging to have them hired temporarily by another company so that they can secure residency visas and work permits. However, UAE regulations require that the visas granted to those workers must be specific to the hiring company and prohibit them from working for another company. Companies that hire workers illegally face fines of AED 50,000 per worker for the first offense and AED 100,000 for a second offense.

BAL Analysis: The UAE, and Dubai in particular, is becoming more streamlined and also stricter in enforcing immigration regulations. Employers should be aware that compliance audits are increasing. Companies that are found to be employing workers without proper authorizations or visas will face fines and draw closer scrutiny from the authorities moving forward.

This alert has been provided by the BAL Global Practice group and our network provider located in United Arab Emirates. For additional information, please contact your BAL attorney.

Copyright © 2016 Berry Appleman & Leiden LLP. All rights reserved. Reprinting or digital redistribution to the public is permitted only with the express written permission of Berry Appleman & Leiden LLP. For inquiries please contact copyright@bal.com.