The UAE Ministry of Human Resources and Emiratisation (MoHRE) has levied over Dh34 million in fines against more than 1,300 companies. These penalties stem from violations related to inactive business operations and the registration of workers without genuine employment relationships, underscoring the UAE’s commitment to maintaining a transparent and compliant labor market.
UAE Cracks Down on Inactive Businesses
MoHRE has identified approximately 1,300 establishments, linked to nearly 1,800 employers, that were not actively conducting their licensed business activities since the beginning of the year. A significant concern was the practice of these inactive companies retaining registered workers without any actual work being performed.
Penalties Imposed
In response to these violations, MoHRE has implemented a series of stringent penalties:
- Fines: Over Dh34 million (approximately $9.25 million) in fines have been issued.
- Work Permit Suspension: The issuance of new work permits for these non-compliant entities has been suspended.
- Classification Downgrade: Affected companies have been moved to the lowest category within the private sector classification system, which entails tighter restrictions and further penalties.
- Registration Ban: Owners of these establishments are now barred from registering any new businesses within MoHRE’s system.
Legal Framework and Enforcement
These actions are firmly rooted in the UAE’s labor laws and recent resolutions, including Federal Decree-Law No. 33 of 2021 on Regulating Labour Relations, Cabinet Resolution No. 21 of 2020 concerning service fees and administrative fines, and Ministerial Resolution No. 318 of 2024. MoHRE emphasizes that retaining workers without a legitimate employment link in an inactive business is a serious legal violation, with consequences for all parties involved.
Monitoring and Compliance
MoHRE utilizes advanced smart systems and conducts field inspections to monitor business activity effectively. The monitoring process considers various indicators, such as:
- The number of sponsored workers.
- The company’s licensed activities.
- Recent transactions with the ministry.
- Overall operational status.
The ministry urges business owners to cancel their licenses and update their workers’ status if operations cease, warning of severe legal repercussions for non-compliance. The public and employers are encouraged to report any suspicious practices through MoHRE’s official channels.
Sources
- MoHRE fines 1,300 companies over Dh34 million for not practicing licensed businesses, Gulf News.
- Have an inactive business in UAE? Here’s what you should know, Gulf Business.
- Sudan: The UAE says seven RSF-linked companies do not hold active business licences in the Emirates, Business & Human Rights Resource Centre.
- UAE fines employers over $9.25m for fake jobs and inactive businesses, Arabian Business.
