At a Glance
- The Ministry of Human Resources and Emiratization (MOHRE) has expanded the labor market testing requirement to companies of all sizes, causing additional employers in mainland United Arab Emirates to experience delays in obtaining labor approvals for their foreign workers.
- The MOHRE has also introduced an alternate labor market testing method where employers attend an Open Day at the Emiratization Department of the MOHRE, which is expected to streamline the process and provide transparency; however, it may also cause delays depending on the availability of appointments at the MOHRE.
- Employers should incorporate additional time into their hiring process for candidates whose applications will need to undergo labor market testing.
The Ministry of Human Resources and Emiratization (MOHRE) has expanded the labor market testing requirement to companies of all sizes and introduced an alternate labor market test, causing employers in mainland United Arab Emirates to experience delays in obtaining labor approvals for their foreign workers.
A closer look
The requirements for labor market testing are described below with the resulting impacts and delays:
- Expansion to companies of all sizes. Although labor market testing requirements were implemented in 2017, until recently, only large companies in specific sectors identified by the MOHRE were expected to go through this hiring process. Currently, companies of all sizes are being asked to go through the labor market testing process.
- Impact. Due to the expansion, additional companies will likely have to submit applications for labor market testing which may take an additional few weeks to process.
- Alternate labor market testing process introduced. The MOHRE has introduced an alternate labor market testing process, which can be used instead of the online portal registration process currently in place. The new process requires employers to schedule an Open Day appointment with the Emiratization Department where the employer interviews Emirati candidates for the open position; if a suitable Emirati candidate is found, they are expected to hire the candidate within five days of the interview. If the company cannot find a suitable Emirati candidate, it can extend a job offer to a foreign candidate but must provide a justification for any rejected candidates.
- Mandatory Open Day process. In addition to opting to hold an Open Day instead of using the online portal labor market test, some companies have been required by the MOHRE to hold an Open Day, even if they are not currently advertising for an open position. This appears to be a tactic for the MOHRE to encourage employers in certain industries (i.e. those considered priority sectors) to hire Emirati nationals.
- The Open Day process is expected to streamline the labor market testing process as employers will no longer have to wait for the MOHRE to respond with the various resumes of Emirati nationals after advertising on the online portal. However, the labor market testing process may be delayed if the employer has chosen to or has been requested to attend a specific Open Day with the Emiratisation Department since appointments for Open Days are often only available a few weeks into the future.
- The Open Day process is also expected to provide transparency to the labor market testing process as employers will be able to screen potential Emirati candidates in person and give immediate feedback to the MOHRE.
- Employers affected by labor market testing should take immediate action to complete labor market testing. Fragomen can assist clients with appropriate strategies and can provide other information on government-led training and other programs and initiatives offered by the MOHRE.
- These new requirements only apply in the mainland and do not apply in free trade zones.
- In exceptional cases, employers may request an exemption from the labor market testing requirement, which will be adjudicated by the Emiratisation Department on a case-by-case basis. An example of an exceptional case could include companies with government projects that require a specific skillset.
- Emiratisation efforts. The extension of labor market testing to all companies comes as a result of the government’s effort to increase the ratio of Emirati nationals working in the private sector to 5% by 2021.
- Additional restrictions on hiring foreign nationals. In addition to expanding the types of employers who must undergo labor market testing, earlier this year, the government introduced a more restrictive occupations list which made it more difficult for employers to choose occupations which do not require labor market testing. As a result, more Emirati nationals will be given an opportunity to apply for these positions, increasing Emirati employment in the private sector.
- Other localization efforts in the Middle East. Other Middle Eastern countries are also increasing local hiring, including Kuwait, which added fines for employers in the private sector who are noncompliant with prescribed Kuwaitzation ratios, and Oman, which has continuously suspended the recruitment of foreign nationals for certain professions.
As the United Arab Emirates continues to try to increase Emirati employment in the private sector, particularly in skilled professions, additional restrictions on the hiring of foreign nationals could be forthcoming. However, the country intends to balance these restrictions with relaxed rules meant to attract investment in the country, including administrative fines being waived and a long-term residence program being introduced.