In the UAE, at least 90 percent of an employee's minimum salary must be paid through the UAE's Wage Protection System (WPS).
In the UAE, at least 90 percent of an employee's minimum salary must be paid through the UAE's Wage Protection System (WPS).
The Wages Protection System (WPS) is an electronic salary transfer system that allows organizations to pay wages through banks, bureau de change and financial institutions.
The Ministry of Human Resources and Emiratisation recently clarified in the 2022 Ministerial Resolution.
It also includes clarification on the obligations of private sector businesses to engage with the WPS
Nasser Musa, CEO of PRO Partner Group, a UAE company service provider, stated.
An increase in the minimum amount of an employee's salary, which must be paid through the WPS. Under the new amendments, it has been raised from 80 percent to 90 percent.
The Ministry of Human Resources and Emiratisation (MoHRE) recently issued Ministerial Resolution No.43 of 2022, outlining a series of administrative procedures against firms that fail to pay workers on time.
The resolution highlights other important requirements that private sector employers must meet:
Salary of all employees should be paid through WPS on due date
If the salary is not remitted by the 15th of the month, the company can be blocked from the system from the 17th of the following month.
90 percent of the total salary must be transferred every month to avoid blocking the company and incurring fines. Earlier, only 80 percent of wages were to be paid through WPS
Employers will have a 30-day grace period to transfer the salaries of new employees through WPS
"This means companies in the UAE must immediately review their payroll and payroll processing procedures to ensure they comply with the new rules," Musa said.
These changes further strengthen protections for employees in the UAE and ensure they are paid accurately and on time.
Musa said that the WPS system has been very successful in the UAE in upholding the rights of employees and paying salaries accurately every month.
“The new system, with a 30-day grace period, allows an employer more flexibility and time to onboard a new employee into the WPS system – ensuring that employees can be properly set up in the system to ensure they are paid. WPS,” he added.
Why install WPS?
The WPS is an integral part of the UAE Labor Regulations. It is a system designed to ensure that companies meet their obligations to pay their employees promptly and uphold workers' rights.
It was established in 2009 by the Ministry of Human Resources and Emiratisation (MOHRE) in association with the UAE Central Bank.
Basically, it is an electronic wage transfer system that monitors and oversees the payment of salaries to workers in the UAE and allows MOHRE to keep records of private sector salary payments to identify employers who fail to pay salaries on time.
The employee's labor file number is linked to their employment contract at MOHRE. It is linked to the central bank and companies must clear all payments through their employees' bank accounts.
The WPS system will match the salary level registered in the employee's employment contract to ensure the correct amount is paid.
If the amount is less than 90 percent of the salary level registered in the MOHRE work contract, the company should be blocked by MOHRE and the payment issue should be resolved.
If the block remains unresolved, the company will be liable to fines and if the salary is not paid correctly, the company will be sued in the Labor Court.
The WPS system provides excellent protection to employees in the UAE by ensuring they are paid correctly and on time. "The system has been very successful in the UAE in upholding employee rights and processing salaries accurately every month," Musa said.
The WPS system provides excellent protection to employees in the UAE by ensuring they are paid correctly and on time.
