Strict new measures over salary delays for workers will “tighten oversight”, the UAE's labour ministry said on Thursday as it revealed that it had sent 60 million warnings to private sector companies last year to urge them to pay on time.
Changes introduced on June 1 to the country's Wage Protection System will see authorities acting sooner against firms flouting the rules.
The Ministry of Human Resources set out a list of escalating penalties for late-paying employers, from fines and suspending the issuance of work permits to seizing assets and imposing travel bans for repeated delays, at a media briefing.
The ministry said more than Dh37 billion in wages are paid each month by about 600,000 private sector companies, highlighting the potential cost of late payment to a huge number of workers.
The previous 15-day grace period for non-compliance had been cut to 10 days, effective from the payment of June salaries on July 1, under the revised regulations.
“Companies will receive notifications and emails to remind them about the payment,” Khalil Al Khoori, undersecretary of labour market and Emiratisation operations, said on Thursday.
“The changes strengthen the Wage Protection System and tighten oversight of salary payments. We have Dh37 billion of wage transactions every month from private sector companies to employers.
“The new decision does not introduce any major new obligations for employers. The system provides a stable and transparent work environment and supports the UAE’s position in attracting talent and skilled professionals.”
Mr Al Khoori said the ministry would monitor every private sector business to ensure they were sticking to the rules. “We will send alerts and notification to non-compliant companies. Last year we issued more than 60 million notifications and emails to companies [relating to salary payments],” said Al Khoori.
He warned that legal action could be taken if salary delays persist, especially in key sectors with large workforces. “This will be mostly for labour-intensive sectors such as construction, transportation, security services, maintenance and cleaning services,” he added.
What are the updated regulations?
From the due date for wage payments, the ministry will monitor all companies electronically to ensure compliance. If wages remain unpaid by the second day, the ministry will start issuing alerts and notifications to companies.
By the fifth day, if the salaries remain unpaid, the ministry will suspend the issuance of work permits for the company. On the 11th day, repeat offenders within a six-month period will face fines and be downgraded to the ministry’s “third category” of business classification.
On the 16th day, penalties will become more severe, and labour disputes will be automatically registered for affected workers – either individually or collectively. Issuance of work permits will also be suspended for offending companies, particularly those employing at least 25 workers.
The toughest measures will be enforced if salaries remain unpaid by the 21st day. That is when the ministry is likely to issue executive orders for salary payments, initiate precautionary asset seizure procedures and impose travel bans on company managers.
Companies employing 50 or more workers and firms that repeatedly break the rules may also be referred to prosecutors, especially if authorities believe the violations could threaten labour market stability, according to the ministry resolution.
The Wage Protection System was launched in 2009 by the ministry and the UAE Central Bank to ensure private sector employees are paid their wages accurately and on time. The latest resolution further strengthens oversight of the system.
Employers are deemed compliant if they pay at least 85 per cent of total wages due by the deadline. Similarly, employees will be considered to have received their wages if they are paid a minimum of 85 per cent of their due salary, provided any deductions are legally permitted under UAE labour law.
