UAE begins implementing new wage protection scheme

The decree will impose hefty fines on companies that fail to pay their workers on time



The UAE will begin implementing its newly launched wages protection decree – which will ensure that workers are paid on time – from Monday, an official has confirmed.

The decree, launched by minister of Human Resources and Emiratisation, Saqr bin Ghobash Saeed Ghobash, also warrants that employees receive full payment of their salaries.

“The decree fairly contributes towards labour market stability as it safeguards employees while keeping business owners interests,” official news agency WAM quoted Maher Al Obed, assistant undersecretary for the Inspections Sector as saying.

“Salaries paid on time is a major contribution towards labour rights protection which is highly recognised by the UAE.

“We value such decisions as it promotes labour relations which in turn secures a balanced labour market productivity, and eventually turns out with positive outcomes for both labourers and employers,” he added.

Under the decree, companies employing over 100 workers must pay their employees salaries within 10 days from the registered payday in the wage protection system (WPS).

If they fail, the ministry will stop granting them any additional work permits starting from the 16th day of delay.

“Two main scenarios should be considered in this matter. Firstly, salary delays occur usually if the company fails to pay wages a month from the due date, the second, which refers to completely refraining wages, starts after entering into the second month. However, the decree shall refer to each case in a different matter,” Al-Obed said.

If a company delays wages for a month from the due date, it has “entered into a refrainment period”, and the ministry will inform judicial authorities and other related parties to take all necessary punitive measures against the violating company.

“If the company fails to pay wages for 60 days from the due date, then administrative fines shall follow, in addition to registered fines for failing to pay wages a month from the due date, as stated above in the first scenario,” Al-Obed added.

Administrative fines begin from Dhs 5,000 per worker to reach a maximum of Dhs 50,000 in situations where multiple workers are not paid for over 60 days.

The ministry will also halt other companies owned by the same employer and forbid any upcoming projects planned by the owner, the report said.

If a company still continues to refrain from paying the wages, the ministry will use the company’s bank guarantee, downgrade it to a third category and enable its workers to move to other firms.

The ministry will allow violating companies to apply for new work permits only if they pay deferred wages during the first late month, while the ban lasts for 60 days if companies fail to pay salaries for more than two months.

Under the decree, repetitive violators shall also face a doubled duration ban.

Meanwhile, for companies that employ less than 100 workers, the current regulations shall apply if they fail to pay wages within 60 days – including work permit bans, fines and court referrals.

If a company repeats such violations over the span of one year, the ministry shall apply penalties declared for companies hiring over 100 workers.

The decree also states that the ministry shall not proceed with any transactions with companies that have not registered in the WPS.