United Arab Emirates: MHRE Classification System - Is Your Company Aware Of The Recent Changes?

Last Updated: 4 January 2018
Article by Sara Khoja and Sarit Thomas

New legislation has been published by the Ministry of Human Resources & Emiratisation (MHRE) which may impact companies' grading and compliance requirements within the existing classification system. In a move to encourage private sector buy-in, MHRE has added a layer to the existing classification system, expanded on the list of exemptions to payments of bank guarantees, defined workers considered 'skilled' and with 'limited skill' and applied reduced fees to MHRE services involving 'skilled' workers. This article examines these recent changes and provides a condensed synopsis of the current classification position.

In August 2017, we reported on some changes to the MHRE classification system in place. By way of a recap, Cabinet Resolution No. 11 of 2017 came into effect on 1 December 2017, adding an additional layer to the existing classification system by introducing an additional band within the Category Two classification (Band D) and expanding on the list of exemptions applicable to payment of the bank guarantee. It further made a distinction between workers with 'limited skill' and those who are 'skilled'. In addition, Cabinet Resolution No. 15 of 2017 came into effect at the same time and amended the fees payable to MHRE for the services they provide, including incorporating fees applicable to the newly introduced Band D and distinguishing between fees payable for 'skilled' workers and those considered to have 'limited skill'.

In October 2017 MHRE issued further legislation to complement the above resolutions. Ministerial Resolution No. 729 of 2017 (Resolution No. 729) came into effect December 2017 and sets out definitions for both 'skilled' and 'limited skilled' workers and further expands on the classification criteria for Category One, Two and Three.

Where it all began...

The system of classifications originally began with the enforcement of Cabinet Resolution No. 26 of 2010, which introduced the three categories and the basic parameters for each classification. Since this resolution four supplementary laws have been published which complement and expand on the original text. These include; Ministerial Resolution No. 1187 of 2010 which developed the criteria companies are required to satisfy in order to qualify into each category, Ministerial Resolution No. 740 of 2016 which set out circumstances in which companies grouped within the Category Two classification could be upgraded, either within Category Two or to Category One, Cabinet Resolution No. 11 of 2017 which, as described above, introduced a new band within Category Two and the recently published Resolution No. 729.

Resolution No. 729

Before delving into Resolution No. 729, it is worth expanding on the previous changes made. As alluded to above and in our previous article (link above), Resolution No. 11 of 2017 (Resolution No. 11) makes two distinct changes to the classification system. Firstly, it adds an additional 'Band D' within the Category Two classification and classifies workers working for companies falling under the three categories into 'skilled' or with 'limited skill' and secondly it reiterates the circumstances in which companies may be exempt from paying the bank guarantee to MHRE for new workers, as previously set out in Resolution No. 26 of 2010. The amount payable in terms of bank guarantees remains unchanged; however the resolution confirms the amount payable by such companies falling within the newly introduced Band D, Category Two. The below table provides a recap on the bank guarantee minimum and maximum caps.

What remained unclear following the publication of Resolution No. 11 was the criteria establishments need to satisfy in order to fall into Category Two, Band D and what the resolution meant by 'skilled' and 'limited skilled' workers, albeit statutory provisions pertaining to skill levels have been in place for some time. Resolution No. 729 has clarified any previous ambiguities by clearly defining 'skilled' and 'limited skilled' workers and setting out the criteria for Category Two, Band D as well as expanding on existing criteria in place for other categories.

'Skilled' and 'limited skilled' workers

Resolution No. 729 defines 'skilled' workers as those employed to perform a role which requires the worker to hold, as a minimum, a legalised education certificate higher than the general secondary education certificate with the implication being that such workers must hold a diploma or a degree certificate (or such equivalent). 'Limited skilled' workers are those not meeting the minimum requirements under the definition of 'skilled' workers.

Classification Criteria

The resolution sets out the criteria companies must meet for each classification level. With respect to the Category One, the resolution confirms which companies will be considered as falling within this category and consequently benefiting from not having to pay a bank guarantee for their workers. Such companies include; fishing boats owned by UAE nationals, compliant members of the Emiratisation Partners Club, the newly established Tad-beer service centres and certain small, medium sized companies and members of the Youth Entrepreneurship Support Institutions. Additional exemptions to the payment of the bank guarantee exist under the provisions of Resolution No. 11.

The criteria for Category Two has been amended to incorporate the new Band D, increase the cultural diversity levels and the minimum levels for skilled workers which were previously in place. What currently remains unclear is the method in which cultural diversity is calculated. The below table illustrates the criteria within Category Two.

The position for companies with a maximum of three workers remains unchanged; they will remain classified as Category Two, Band B. However companies with 4-10 workers will be classified as Category Two, Band B on the proviso that they satisfy the minimum cultural diversity requirement, being 50%. Those that do not will be lowered to Category Two, Band D.

In terms of Category Three, the new resolution provides a list of offences which if undertaken will result in companies finding themselves being categorised as Category Three. Such offences inter alia include; being convicted of human trafficking offences or of employing illegal workers, falsifying Emiratisation numbers, entering incorrect data on the Wage Protection System (WPS) or failing to pay workers through WPS and failing to report workplace injuries.

The category and the band (as applicable) as well as the worker's skill level will all directly impact whether a bank guarantee is payable by the company as well as the amount of fees payable for every day MHRE services, such as issuing and renewing work permits. MHRE is taking positive steps to encourage cultural diversity and recruitment of more skilled workers within the private sector labour force and is incentivising companies to reinforce such position within their establishments by financially rewarding those who take heed with reduced administrative fees.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions