Emiratisation plan to require labor market testing

IMPACT – MEDIUM

What is the change? The Ministry of Human Resources and Emiratisation has announced a multi-pronged Emiratisation program aimed at employing tens of thousands of Emiratis in public- and private-sector jobs this year. The plan will require private-sector employers to consider local candidates before applying for a work permit.

What does the change mean? Mainland companies seeking to hire in more than 300 designated professions in skill level 1-3 will be required to interview Emiratis who are selected by the ministry. The company will need to justify reasons for rejecting an Emirati before the ministry approves a work permit. Companies with fewer than 10 employees will be exempt.

• Implementation time frame: Ongoing.
• Visas/permits affected: Work permits.
• Business impact: Mainland private-sector companies that plan to apply for work permits should prepare for labor market testing and documenting their recruitment process.

Background: The labor market test is part of an ongoing Emiratisation strategy. The government is also implementing a national employment policy to train and prepare local workers and increase their participation in the labor market, and will introduce a program to promote self-employed individuals.

Analysis & Comments: The Emiratisation plan signals that UAE authorities continue to prioritize boosting local employment in certain industries and either restricting employment of foreign nationals in certain jobs or providing incentives for hiring and training Emiratis. The labor market testing provision requires mainland employers to adopt new recruiting procedures and is expected to be gradually implemented. It is not expected to be applied to free zones.

Source: Deloitte LLP. Deloitte LLP is a limited liability partnership registered in England and Wales with registered number OC303675 and its registered office at 1 New Street Square, London EC4A 3HQ, United Kingdom.