Workmen Compensation Act vs Involuntary Loss of Employment Insurance

In the UAE, protecting employees' health, safety, and financial well-being is not just a responsible business practice—it's the law. Two critical insurance policies help safeguard employees in different circumstances:

• Workers Compensation Insurance (also called Workmen Compensation Insurance in the UAE)
• Involuntary Loss of Employment Insurance (ILOE)

While both are designed to support employees, they serve very different purposes. One covers workplace injuries and accidents, while the other helps employees who have lost their jobs involuntarily. Understanding the difference between Workers Compensation Insurance and ILOE is essential for both employers and employees in the UAE as each policy plays a unique role.

What is Workmen Compensation Insurance UAE?

Workers Compensation Insurance is a mandatory insurance policy that protects employees who experience injuries, illnesses, disabilities, or death caused by their job or workplace. This insurance is a legal requirement under the UAE Labour Law and ensures financial support to employees or their families in the event of workplace-related incidents.

Key Features

• Mandatory for all employers in the UAE
• Covers medical expenses, disability, and death compensation
• Provides legal liability protection for employers
• Employees are not required to contribute financially

Coverage Includes

• Medical treatment: Hospital bills, surgery, rehabilitation
• Temporary or permanent disability compensation
• Death compensation: Paid to legal heirs
• Legal liability cover: Protects employers from lawsuits by employees or their families

What is Involuntary Loss of Employment Insurance in the UAE?

ILOE Insurance is a mandatory social insurance scheme introduced under Federal Decree Law No. 13 of 2022. It provides temporary monthly compensation to employees who lose their jobs due to circumstances beyond their control (e.g., layoff, restructuring), and not due to resignation or disciplinary action.

Key Features

• Mandatory for all the UAE employees (private & federal sector)
• Covers job loss for non-disciplinary reasons
• Compensation up to 60% of average basic salary for 3 months
• Employees must pay a small monthly premium
• Available to Emiratis and Residents

Exempted Categories

• Company owners and investors
• Domestic workers
• Temporary workers
• Retirees with a pension
• Juveniles under 18

Workers Compensation Insurance vs Involuntary Loss of Employment UAE

Here’s a clear comparison table highlighting the key differences between the two insurance types —

Legal Responsibilities of Employers in the UAE

Employers in the UAE are legally required to —

• Purchase Workers Compensation Insurance for all staff
• Report all workplace injuries and deaths
• Provide immediate medical support
• Cooperate in the claim process by submitting necessary documents
• Ensure compliance to avoid penalties, fines, or business suspension

Employees are entitled to —

• A safe work environment
• Free treatment for work-related injuries
• Disability compensation (temporary or permanent)
• Death compensation to legal dependents

Claim Process: Workers Compensation Insurance and Involuntary Loss of Employment Insurance 

1- WCI 

Claiming your amount is a straightforward process.  Just follow these simple steps —

• Employee or family informs the employer immediately
• Report incident to the labor department or relevant authority
• Submit required documents to the insurance company
• Insurer verifies and processes the claim
• Compensation is paid directly to the employee or their family

Required Documents:

• Incident or accident report
• Medical reports and certificates
• Employee ID and salary slips
• Death certificate (if applicable)

2- ILOE

Here’s the claim submission process —

• Must be made within 30 days of job loss
• Through ILOE portal, insurance providers, or government centers

Payment Options:

• Monthly
• Quarterly
• Semi-annually
• Annually

How to Subscribe:

• ILOE Portal: www.iloe.ae
• ILOE Mobile App
• Al Ansari Exchange branches
• Through telecom bills
• Via SMS, bank apps, business centers

Workers Compensation Insurance Price in the UAE

The cost of Workers Compensation Insurance depends on —

• Type of business (e.g., construction, office work)
• Number of employees
• Average salary levels
• Workplace risk exposure

Tip: Use licensed UAE insurance brokers to compare quotes and get better pricing.

ILOE Insurance Compensation and Categories

Monthly Compensation

• 60% of the average basic salary over the last 6 months
• Paid for up to 3 consecutive months per claim
• Total lifetime benefits capped at 12 monthly payments

Employee Categories

Conditions for ILOE Compensation

To qualify for compensation, you must —

• Be subscribed to ILOE for at least 12 consecutive months
• Lost your job involuntarily (not due to resignation or misconduct)
• Be actively looking for a new job
• Not have another income source or active employment

Final Thoughts: Choosing the Right Insurance for Your Workforce

Both Workers Compensation Insurance and ILOE Insurance serve essential but different roles in the UAE's employment landscape:

• If you’re an employer, Workmen Compensation Insurance UAE is legally mandatory to protect your staff and business in case of workplace injury
• If you’re an employee, ILOE Insurance offers a vital financial safety net during job loss and is also mandatory to maintain compliance

By understanding these two insurance types, you ensure better financial protection, legal compliance, and a responsible workplace culture.

Frequently Asked Questions