UAE’s Wages Protection System (WPS) Regulations

The Wages Protection System (WPS) was implemented at the Central Bank of the UAE (CBUAE) and launched in June 2009 to meet the desired objectives of the Ministry of Labour (currently known as the Ministry of Human Resources and Emiratization). The objective of UAE-WPS is to provide a safe, secure, efficient, and robust mechanism to streamline the timely payment of wages to employees by their employers.?The UAE-WPS has been enforced as a mandatory system for all UAE companies.

The model adopted by CBUAE is one where information flows from the employer to one or more of the contracted agents for payment of the wages to their employees.?Funds from the employers are secured by CBUAE prior to dispatching the wages information to the agents. The efficiency and governance of the system are ensured by compliance with the domestic and international standards as well as the rules detailed by Central Bank in the system’s Rules document.

The system empowers the Labor Regulatory Authority (LRA), with the functionality that would allow effective monitoring of the payment of wages by the employers to their respective employees.?

WPS provides the required functionality to:

-?????????Record entities in an industry-standard database for future reporting and maintenance.

-?????????Facilitate the monitoring of fund flows.

-?????????Accept fund transfer from the employer’s bank and onward transfer to the agents with balances maintained at the employee level.

-?????????Provide salary details pertaining to the employees to specific agents.

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WPS Receives and processes:

-?????????Receipt confirmations from agents against wages to be paid to employees.

-?????????Disbursement information provided by the agents against wages that the agents have paid out to the employees.

-?????????Refund requests from employers.

-?????????Refund responses from agents.

-?????????Provide data feeds to LRA on a frequent basis to enable effective monitoring.

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Under this system, salaries of employees will be transferred to their accounts in banks or financial institutions, which are authorized by the Central Bank of the UAE to provide the service.

MoHRE does not process any transactions or deal with the owners of the companies that are not registered with the WPS until they register in the system.

Payment can be in Emirati Dirham, the national currency of the UAE, or in any other currency if it is agreed upon between both parties in the employment contract.

Reporting unpaid or delayed salaries

For any concerns or complaints regarding unpaid or delayed salaries, employees may contact the Ministry of Human Resources and Emiratisation (MoHRE) or register a labor complaint.

Wages are paid in accordance to Ministerial Decree No. 43 of 2022 Regarding the Wages Protection System.

When should employers pay salaries?

The employee's wages are due from the first day of the month following the expiry of the period for which the wages are specified in the employment contract.

If the period is not specified in the employment contract, the employee must be paid at least once a month.

The employer is in default of paying the wage if he does not pay it within the first 15 days after the due date unless a shorter period has been agreed upon in the employment contract.

Minimum wages

There is no minimum salary stipulated in the UAE Labour Law, however, it broadly mentions that salaries must cover the basic needs of the employees.

Penalties for companies failing to pay salaries on time

MOHRE has very strict rules when it comes to paying wages on time, failing to do so compliantly through the WPS will result in penalties such as electronic system block, fines, …etc. ?

Companies that fall under WPS penalties are categorized as mentioned in this link:

https://u.ae/en/information-and-services/jobs/payment-of-wages