WAGES PROTECTION SYSTEM, AND WHAT UAE LAW SAYS ABOUT SALARY DELAYS

A Referrence to the UAE's Wages Protection System based on official government data.

What is the WPS in the UAE?

As explained by Mohre’s Wages Protection System, WPS is an electronic salary transfer system that allows companies to pay workers their wages through banks, bureaux de change, and financial institutions that are approved and authorized to provide the service.

The WPS covers all institutions registered with the ministry across all sectors and industries, and will benefit different categories of labour. WPS helps employers safeguard their interests and reduce the time and effort taken to pay wages; and improves job security and strengthens working relationships.

Mohre is regularly and constantly updated on wages data in the private sector in order to guarantee that employers fulfil their salary obligations; and serves as a protective and proactive measure to reduce labour disputes pertaining to wages.

WPS UAE FINE

Similarly, late or unpaid salaries are also penalized under the stipulations that guide WPS. An employer is considered as being ‘late’ to pay wages if the salary is paid within 10 days from the due date – which makes it the next day of the end of the salary period – or if the salary is not paid within one month of the due date. Serious penalties apply on companies that are failing to pay salaries. Fines for companies that employ more than 100 workers, and have not paid dues within a 10-day period, are as follows:

·         They will not be issued work permits starting from the 16th day from the date of delay

·         Such companies delaying wages a month from the due date will be referred to judicial authorities      ·         Action would be taken against all companies owned by the same owner

·         The owner/s will not be able to register any new company

·         Employees’ bank guarantees will be liquidated

·         The company will be downgraded to the third category

·         Workers will be allowed to move to other companies

The UAE Government’s portal says the law states that if a company with more than 100 workers delays salaries for more than 60 days, it will face a fine of AED 5,000 per worker whose wage is delayed, with a maximum fine of AED 50,000 in case multiple employees have not been paid.

Similarly companies employing less than 100 workers that do not pay dues within 60 days of the due date face the following penalties:

·         work permits ban

·         fines

·         referral to court

“If the company commits such violations more than once in one year, Mohre will apply penalties stated for companies that employ over 100 workers,”