Understanding the Ministry of Human Resources and Emiratisation Classification Levels: A Comprehensive Guide

The Ministry of Human Resources and Emiratisation classification is a system that has been established to categorize companies into different levels. Since it is a concept that can be hard to understand, foreign employers need to learn about it to stay compliant.

In this article, you are going to learn everything you need to know about the Ministry of Human Resources and Emiratisation classification, as it is highly important for carrying out your operations in the UAE.

Overview of Ministry of Human Resources and Emiratisation Classification

First of all, it is necessary to understand what MoHRE is. The Ministry of Human Resources and Emiratisation, most commonly known as MoHRE, is the authority in the UAE that regulates everything related to employment.

For instance, some of the responsibilities of this governmental institution are to issue work permits, establishment cards, licenses for temporary employment, and much more.

In this regard, it has established the Ministry of Human Resources and Emiratisation classification system. This is used to categorize companies into three different categories:

  • 1st category
  • 2nd category
  • 3rd category

Thus, as an employer in the private sector working in the UAE, your company will be classified into any of the mentioned categories. This system has many purposes, but the main one is to ensure enterprises adhere to the local law.

Importance of Classification

This new category system was announced on June 1, 2022. From that moment on, companies had to try to follow labour regulations in order to get a better classification.

The Ministry of Human Resources and Emiratisation classification is important due to the following reasons:

  • It addresses the needs of the different business sectors.
  • Protects employees’ rights.
  • Protects workers within the private sector.
  • Promotes entrepreneurship among Emiratis and expatriates, as well as the formation of startups and SMEs.
  • Motivates companies to adhere to the UAE’s comprehensive legal framework

Overall, this system’s main goal is to empower workers and reward companies at the same time. Therefore, it is designed to enhance employment and compliance in the private sector.

Organizational Structure

The Ministry of Human Resources and Emiratisation classification is divided into three categories. Therefore, regardless of the size of the company, sector, and any other factor, it is classified depending on the following:

  • Level of adherence to the new UAE labour regulations.
  • Protection of workers’ rights
  • Adherence to the pay protection system
  • Promotion of diversity both culturally and socially

Thus, MoHRE assesses each company regarding the mentioned aspects and decides in which category is placed.

Classification System Overview

The Ministry of Human Resources and Emiratisation classification may be difficult to understand as first it is necessary to learn about the labour law and many other initiatives that the UAE has implemented in the private sector.

In this regard, the company is classified in the extent of its compliance with local regulations, which is briefly the following:

  • First category: companies that follow the decisions and laws that regulate the labour market. Thus, they fulfill all the general obligations required of companies in the private sector.
  • Second category: companies that follow general standards and comply with the UAE’s policy of cultural and social diversity.
  • Third category: companies that do not follow the policies and decisions that regulate the labour market.

As you can see, companies should aim to be classified in the first category. This is because this way they can get discounts on service fees, and also contribute to the ever-growing economy of the UAE.

First Level in Ministry of Human Resources and Emiratisation Classification

The first level in the Ministry of Human Resources and Emiratisation classification should be the goal for every company in the UAE. These are the companies that fully commit to the local regulations and Emiratisation policies in the UAE.

Therefore, companies classified into this level can enjoy the following:

  • Fees do not exceed AED 250 for the two years when it comes to work permits and transfer fees.
  • Enhanced brand in the UAE as being part of the top companies
  • Possibility of offering better benefits and compensations to employees
  • Attract highly qualified talent in the UAE

Departmental Structure

For a company to be part of the first level in the Ministry of Human Resources and Emiratisation classification, it is necessary to submit an application. After that, the Ministry has to approve it.

This is when the company can be part of the structure of businesses classified in Category 1.

Key Divisions

The company has to comply with all of the following to be classified in Tier 1:

  • Provisions of the decree law that regulates the labour relations in the UAE, and ministerial decisions and executive regulations as well.
  • Comply with the regulations regarding work permits
  • Follow the law regarding employment contracts for expatriates and UAE citizens
  • Adhere to the Wage Protection System

In addition to complying with all of the above, the company must also comply with one of the following:

  • Increase the Emiratisation percentage of the company annually with a rate of at least 3 times the minimum target.
  • Cooperate with Nafis with recruitment and training of at least 500 Emiratis each year.
  • Being a company owned by a young citizen that follows accepted standards.
  • Being a company that works implementing training and recruitment supporting the Skilled Workers Policy by enhancing cultural diversity in the UAE.
  • A company part of a targeted economy sector or activity as per the Council of Ministers

Primary Functions

The primary function of a company in Category 1 is to maintain itself in this tier by continue following the laws and regulations. As a top-ranked company, you can carry out your operations in the UAE by ensuring your maximal operational efficiency.

Particularly, if you work in one of the new sectors, you can do business by taking advantage of all the benefits available for companies that adhere to best practices.

Second Level in Ministry of Human Resources and Emiratisation Classification

The second level in the Ministry of Human Resources and Emiratisation classification is very similar to the first category. This is because this measures the commitment of the enterprise to labour law.

Specialized Units

Previously, these companies belonged to specialized units which were the following classifications in Tier 2:

  • 2A
  • 2B
  • 2C
  • 2D

Nonetheless, according to MOHRE, these subdivisions have now been removed.

Functional Sections

In order to be considered a company in the second level in the Ministry of Human Resources and Emiratisation classification, you have to comply with the following:

  • Compliance with the provisions of the Decree Law that regulates employment relations
  • Follow the regulations about work permits
  • Adhere to the law regarding employment contracts for expatriates and UAE citizens
  • Implements and follows the Wage Protection System

As such, your company is in category 2 if you follow the above, and you are part of the functional sections of MOHRE.

Intermediate Departments

The second category of MOHRE classification could be considered as the intermediate departments, as you are not a high-risk business but you are not at the top either.

However, it is worth considering that new establishments are classified automatically in Category 2 as long as they comply with the policy of cultural and demographic diversity in the UAE, which states the following:

  • Companies that make social and cultural diversity a key part of their core values
  • Offer equal employment opportunities to candidates from diverse cultural backgrounds
  • Follows the Emiratisation policy and empowers Emiratis with job opportunities

Third Level in Ministry of Human Resources and Emiratisation Classification

The third level in the Ministry of Human Resources and Emiratisation classification is the lowest one, and it should not be the goal of your company to remain in this category.

Branches or Teams

The third level in the Ministry of Human Resources and Emiratisation classification categorizes companies that fail to follow the decisions, laws, and policies established by the UAE Authorities.

Therefore, your company will be classified in Category 3 if you are non-compliant with regulations. Therefore, it is important to have teams that work on the following:

  • Constantly check for updates in the local regulations or new policies.
  • Encourage the recruitment of UAE Citizens.
  • Promote cultural diversity in your workplace, by hiring people from different backgrounds, including hire Emiratis.
  • Obtain the required UAE work permits for all of your employees
  • Provide the correct data about your workforce
  • Get all the proper documentation for your employees
  • Ensure to not breach any of the workers’ rights such as not complying with wages or safety standards.

Detailed Subdivisions

The following are the criteria for companies classified in the third category:

  • Companies that are incurring violations of the Federal Decree Law No 33 of 2021, most commonly known as the Labour Law.
  • Corporations that do not achieve the percentage needed according to the policy of cultural diversity and skilled workers.

Operational Units or Sections

As a business, your goal should be to adhere the most possible to the local regulations. In this regard, you must have operational units or sections that have experts following the law to ensure your business stays in compliance.

Thus, if you opt for staff outsourcing, you have to ensure your workforce complies with the diversity and cultural policies in the UAE, as well as with labour law. Otherwise, you will be in the third category of the Ministry of Human Resources and Emiratisation classification.

FAQs on MOHRE Classification Levels: Key Questions and Answers

What is the purpose of MOHRE classification levels?

The purpose of the Ministry of Human Resources and Emiratisation classification is to ensure that companies in the private sector follow the Labour Law and ensure their workers’ rights are protected.

Furthermore, the UAE Authority implemented these levels as an incentive for companies to start recruiting more Emiratis, to comply with the Emiratisation program, as well as to cooperate with Nafis.

How many classification levels does MOHRE have?

The Ministry of Human Resources and Emiratisation classification has three levels, which are the following:

  • 1st category
  • 2nd category
  • 3rd category

How do MOHRE classification levels contribute to operational efficiency?

The classification levels by MoHRE aim to encourage companies to start employing more Emiratis, as well as to cooperate with Nafis and comply with additional requirements to be ranked at the highest level.

In addition, it can increase operational efficiency as companies are eager to follow the local guidelines and to ensure a great workplace for their staff members.

Thus, by being classified as a company in Tier 1, both the employer and employees can enjoy several benefits that will positively contribute to the performance of the business.

Are MOHRE classification levels subject to change?

In the UAE, there are constant changes in the law and regulations. Thus, this new system was implemented in 2022 so it can be said it is recent.

Nonetheless, the system used to have levels within the categories, particularly in Tier 2, which was divided into A, B, C, and D. But recently that was modified. Therefore, there could be a change in the classification levels and companies have to adapt to it.

In terms of whether the company can change its current classification, it is possible by applying for an upgrade and the Ministry has to approve it.

Where can I find more information about MOHRE classification levels?

Since the MOHRE classification levels are recent, and companies want to comply with the law, it is important to learn more about it.

Therefore, you can learn more about it at the official website of the Ministry of Human Resources and Emiratisation.

Allow Emiratisation Nafis to Manage Your Emiratisation Needs in Dubai

Having a compliant workforce can be a challenge if you are a foreign employer. Understanding the Ministry of Human Resources and Emiratisation classification or dealing with Emiratisation can make it even more complex.

For this reason, if you want to get a service provider that can handle your Emiratisation needs, you have to contact us. Get the support you need to be a successful business in the UAE. Learn more about us to find out how our experts can make your business thrive.

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