UAE government warns companies to pay employees on time and in full

The Wage Protection System ensures salaries are paid within 10 days from the registered payday

The Ministry of Human Resources and Emiratisation has called on companies to transfer salaries through the Wage Protection System. Chris Whiteoak / The National

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The Ministry of Human Resources and Emiratisation on Monday reminded private companies to transfer the salaries of their employees to bank accounts to avoid fines.

Salaries should be transferred through the Wage Protection System on fixed dates, the ministry said.

"The ministry seeks to ensure the worker’s right to receive his wage in return for his commitment to perform his job duties," said Maher Al Obed, assistant undersecretary at the ministry.

"It also contributes to increasing the worker productivity as a result of paying the wages on time and the specified amount."

The system, introduced in 2009, ensures timely payment of wages.

According to Ministerial Decree No 739 of 2016 concerning the protection of wages, all companies registered with the ministry must subscribe to the WPS and pay salaries through the system.

How does WPS work?

Private sector companies registered with the ministry must open an account with a bank in the UAE. WPS authorises the employer's bank or agent to pay salaries to the employees and the bank then transfers the salary to the employee's bank account.

Salary transfer can be done through banks, bureaux de change and financial institutions approved and authorised to provide the service.

Fines for flouting WPS rules

The authorities will penalise companies that are late in paying salaries and for failure to follow the rules.

Wages not transferred within 10 days of the due date are considered a late payment. These are the fines for flouting rules:

  • If a company submits incorrect data to evade the transfer of salaries, then a fine of Dh5,000 ($1,360) for each worker and a maximum of Dh50,000 if there are several employees involved is applicable
  • There is a fine of Dh1,000 per worker if the salaries are not paid by the due date through the system
  • Getting fake salary slips signed by the employees can lead to a fine of Dh5,000 per worker

All companies and businesses registered with the ministry must sign up with the WPS and those that fail to will be blocked from all new work permits until salaries are fully paid.

Mr Al Obed said any change in salaries should be done through the approved system.

He said employers can also use the 'statement of account' service for salary transfers, which is emailed every month.

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Updated: January 13th 2022, 7:14 AM