More than 200 different nations have citizens living in the UAE, which helps the nation’s economy and general development. The UAE government had introduced the Wages Protection System in 2019 to simplify payments and wage distribution. WPS was designed to ensure that companies meet their obligations to pay their employees promptly and protection them from financial deflection.
Recently they have added the following amendments to be effective immediately:
- All employee salary must be paid through the WPS on time.
- By the fifteenth day of the month, all salaries must be transmitted.
- Employers have 30 days to use the WPS to transfer new hires’ wages.
The severity of the fines would be determined by the length of time that salaries had not been paid on time, the size of the business, and the number of unpaid employees.
Non-compliant establishments will get notices and reminders from the ministry. New work permits will no longer be issued for these establishments if no action is taken.
The modifications include actions that will be implemented “gradually” against unruly businesses that employ 50 or more employees. The ministry will send information on the establishment to the “appropriate municipal and federal authorities for future legal action” and the public prosecution.
“All non-compliant establishments, regardless of size, that fail to pay wages four months after the due date will face a suspension on new work permits. If the owner operates other establishments listed with the WPS in the UAE, similar penalties will apply to each of them. This will be done after notifying the affected establishments about the suspension of work permits,” as quoted by the ministry.
If the establishment repeats the same violation within six months, an administrative fine will be imposed and the establishment will be downgraded to tier three under the MoHRE’s classification system.
EXEMPTIONS
The amendments additionally permit establishments to submit requests for exemptions from transferring workers’ wages through the WPS in two new situations: workers of foreign establishments or their subsidiaries operating in the nation who receive their wages from abroad and sailors employed onboard vessels or ships, with the workers’ permission.
These examples are in addition to those that were previously exempted, such as UAE-owned public taxis, banks, and places of worship, as well as UAE-owned fishing vessels.
Here is how employers can register for WPS:
On the official website of the MOHRE, employers in the private sector in the UAE can sign up for the Wage Protection System (WPS), after which they will have access to it via a login portal. The necessary paperwork and information list includes:
- A detailed list of the employees filled with details of the bank the company is working with
- Bank account information
- Bank Details of the Employee where they have their company account
- The date on which the salary needs to be paid
With the help of a knowledgeable business establishment consultancy, you can easily enroll for the WPS. For all of your needs regarding business bank accounts, get in touch with Xpert Advisory, the leading name in company formation services in the UAE. Use our consulting services right away.
