UAE decree to ensure wages are paid on time

October 2, 2016

A new decree by the Ministry of Human Resources and Emiratisation (MoHRE) regarding the Wage Protection System (WPS) takes effect from 3rd October 2016.

The decree ensures that salaries in UAE are paid in full and on time, contributing to labour market stability by safeguarding employees whilst keeping business owners’ interests.

The decree is focused on companies with more than 100 workers and ensures staff are paid within 10-days of their registered payday.

Failure to do so will have a number of consequences for all companies owned by a defaulting employer and include the following:

• The ministry blocking further work permits from the 16th day of the delay
• Use of company bank guarantees
• Downgrading of a company’s category
• Application of penalties and fines ranging from Dh5,000 up to Dh50,000

Companies employing fewer than 100 workers will face similar action only after non-payment after a 60-day period.

If these companies repeat such violations in the same year they will then be subject to the same penalties associated with businesses with larger workforces.

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