Payment of the Bank Guarantee Amount for Employment Agencies in UAE

Employment agencies licensed under the Ministry of Human Resources and Emiratisation (MoHRE) must comply with rules on bank guarantee for employment visa in UAE. Agencies are required to provide either a bank guarantee for employees (AED 3,000 per worker) or subscribe to the employee protection insurance scheme. These requirements are part of UAE Labour Law (Federal Decree-Law No. 33 of 2021) and ensure that workers’ rights are protected, while agencies remain compliant with bank guarantee Ministry of Labour obligations.

A bank guarantee for employees is a mandatory financial security that agencies deposit through a UAE bank to cover obligations related to wages, repatriation, and end-of-service dues. It is often linked to the pre-approval for work permit applications, making it a critical compliance step for recruitment agencies in the UAE.

The guarantee provides:

• Protection for workers under the employee bank guarantee UAE scheme.
• Compliance with payment guarantees as per MoHRE regulations.
• Security in case of unpaid wages, repatriation costs, or labour disputes.
• Assurance for both employers and employees regarding financial obligations.

Agencies must choose one of the following options:

1. Bank Guarantee: AED 3,000 per worker, valid for at least one year, renewable, and tied to each worker’s employment visa.
2. Employee Protection Insurance: Premiums between AED 137.50 and AED 250 per worker depending on skill level and WPS compliance.

This ensures every worker has coverage for unpaid wages, gratuity, or repatriation as ordered by the Ministry.

• Apply through a licensed UAE bank.
• Submit documents including trade license and MoHRE approval.
• Pay AED 3,000 per worker as part of the payment terms bank guarantee.
• Link the guarantee to the pre-approval for work permit process.
• Ensure automatic renewal for continuous compliance.

Refunds may be claimed when:

• An employee’s visa and permit are cancelled.
• The worker transfers to another employer.
• The worker is repatriated or deceased.
• MoHRE confirms that all legal dues have been settled.

The Ministry may deduct amounts to cover:

• Wages for up to 120 days.
• End-of-service benefits.
• Repatriation costs.
• Compensation ordered by a labour court or MoHRE.

Criteria	Bank Guarantee for Employees	Employee Protection Insurance
Amount	AED 3,000 per worker	AED 137.50 – AED 250 premium
Refund	Refundable with MoHRE approval	Non-refundable
Coverage	Limited to AED 3,000	Up to AED 20,000 per worker
Liquidity	Capital tied up	Improves cash flow

To operate legally in the UAE, agencies must:

• Maintain a valid employee bank guarantee UAE or insurance.
• Stay compliant with MoHRE payment guarantees.
• Renew deposits or insurance policies before expiry.
• Follow bank guarantee Ministry of Labour rules for employment visas.

The bank guarantee for employment visa in UAE remains a cornerstone of compliance for licensed agencies under the Ministry of Human Resources and Emiratisation (MoHRE). Whether through a bank guarantee for employees or the employee protection insurance scheme, the system ensures workers’ rights are safeguarded while agencies meet their payment guarantee obligations.

For recruitment firms, understanding the payment terms bank guarantee and aligning with MoHRE regulations is not just a legal requirement but also a way to build trust with clients and employees. Choosing the right option—whether cash deposit or insurance—will depend on your agency’s liquidity, workforce size, and compliance record.

By maintaining up-to-date guarantees and fulfilling obligations for the pre-approval for work permit, agencies protect both their business operations and the employees they recruit.