How To Complete A Bank Guarantee Payment When Employment Agencies Face A Shortage
How To Complete A Bank Guarantee Payment When Employment Agencies Face A Shortage. In the world of employment and recruitment services, bank guarantees play a very important role. They serve as a financial safety net that protects both employees and government authorities. But sometimes, employment agencies face a shortage in their bank guarantee amount, especially when combining multiple activities such as temporary employment, outsourcing, and mediation.
So, what happens when there is a shortage? The answer is simple: the agency must complete the payment of the remaining guarantee amount to the Ministry of Human Resources and Emiratisation (MOHRE) or the relevant authority.
What is a Bank Guarantee in the UAE?
A bank guarantee is a formal promise issued by a bank on behalf of its client (the employment agency) to pay a certain amount of money to a beneficiary (usually MOHRE) if the client fails to meet its contractual or financial obligations.
In simple terms:
- If the agency does not fulfill its commitments, the bank pays the Ministry.
- The agency must then replenish the amount to continue its operations.
This system ensures:
- Security for employees hired through the agency.
- Compliance with labour laws.
- Trust between agencies and the government.
Why Do Employment Agencies Face Shortages in Bank Guarantees?
Employment agencies might face shortages in their bank guarantees for several reasons:
- Combining Activities – When agencies operate in both outsourcing and temporary employment, the required bank guarantee amount increases.
- Regulatory Updates – MOHRE sometimes revises guarantee amounts to ensure better protection for workers.
- Agency Expansion – If the agency hires more workers, the guarantee amount must be topped up.
- Guarantee Invocation – If part of the guarantee was used to settle claims, the agency must refill the shortage.
Conditions & Requirements for Completing a Bank Guarantee Payment
When employment agencies face a shortage, they must follow certain conditions and requirements to complete the payment.
| Requirement | Details |
|---|---|
| Who can apply | Individual institution or legal person (employment agency). |
| Service Category | Employer Service under MOHRE. |
| Target Audience | Employers running outsourcing/temporary employment agencies. |
| Partner Services | Banks, MOHRE Smart App, Service Centers. |
| Fees | None (service itself is free, only guarantee amount is paid). |
| Permit Duration | 2 years (with automatic renewal required). |
| Employment Types Covered | Full-time, part-time, temporary, flexible, remote work, job sharing. |
| Documents Needed | – Reference number |
- Receipt for approval
- Bank guarantee letter
Completing the Bank Guarantee Payment
Here’s the step-by-step process employment agencies must follow when facing a bank guarantee shortage:
Step 1: Identify the Shortage
- Check MOHRE records or the agency’s own accounts.
- Identify exactly how much is missing from the bank guarantee.
Step 2: Prepare the Required Documents
- Print the reference number.
- Collect the receipt for approval from the bank or previous transaction.
Step 3: Submit the Difference
- Visit a MOHRE Service Center, or
- Use the MOHRE Smart App or official website.
- Submit the remaining guarantee amount.
Step 4: Deposit the Amount
- Transfer the required amount via bank.
- Ensure the guarantee is renewed automatically for 2 years.
Step 5: Receive Ministry Approval
- MOHRE updates its electronic system.
- The employment agency’s license gets final approval after the guarantee is fully covered.
Important Considerations for Employers
When completing a bank guarantee payment, employers must remember these key points:
- Automatic Renewal: Bank guarantees must be automatically renewed every two years.
- Beneficiary Rights: If the guarantee is invoked, the Ministry or employees are legally protected.
- Transparency: All transactions are recorded in MOHRE’s electronic systems.
- Service Fees: There are no extra service charges.
Issues Relating to Bank Guarantees in the UAE
Bank guarantees can sometimes cause challenges for employment agencies. Below are some common issues:
1. Amount of Guarantee
- The required guarantee depends on the size of the agency and type of activity.
- Larger agencies may face higher guarantee requirements.
2. Time Limit
- Guarantees must remain valid for at least two years.
- Agencies failing to renew face penalties or license suspension.
3. Assignment & Invocation
- If employees raise disputes, MOHRE may invoke the guarantee.
- Once invoked, the agency must immediately cover the shortage.
Reasons for Bank Guarantees and How to Get One
Agencies need bank guarantees for multiple reasons:
- To protect employees’ rights.
- To secure agency licenses.
- To comply with UAE labour regulations.
How to get a bank guarantee:
- Contact your bank.
- Submit an application.
- Mention the reason (employment agency operations).
- Bank issues the guarantee in favour of MOHRE.
Service Channels to Complete the Payment
Employers can complete the payment shortage using:
- MOHRE Website (official portal).
- MOHRE Smart App (available on iOS/Android).
- Service Centers across UAE.
- Call Center (600590000) – For support.
Customer Notification
Once the request is completed:
- The customer (employment agency) will receive a notification.
- Status can be tracked on:
FAQ About Bank Guarantee Payments in the UAE
What happens if my agency does not complete the payment?
Ans: Your agency’s license may be suspended or cancelled until the shortage is cleared.
Is there a fee for completing the payment?
Ans: No, there are no service fees. You only pay the difference in the guarantee amount.
How long does the process take?
Ans: Service completion duration is usually quick once documents and payments are submitted.
Do I need to renew the guarantee every year?
Ans: No, guarantees are renewed every 2 years, but they must be automatic renewal guarantees.
Can I track my application online?
Ans: Yes, you can track it via MOHRE website, Smart App, or by calling 600590000.
Conclusion
Completing a bank guarantee payment when facing a shortage is an essential process for employment agencies in the UAE. It ensures compliance, protects employee rights, and keeps the agency’s license valid.
