Over 3,000 companies are facing legal action after UAE authorities sent them to Public Prosecution for failing to pay salaries through the Wages Protection System (WPS). Under this system, companies must transfer employee salaries electronically to their bank accounts.

WPS also allows the Ministry of Human Resources and Emiratization (MoHRE) to monitor salary payments and take legal action against employers who fail to pay on time.

Last year, MoHRE inspected over 612,000 private sector firms and found over 12,000 violations, leading to hefty fines. The violations included breaking the rules related to employment conditions, safety guidelines, and payment systems.

Some companies did not give a break during hot summer days. Employers were also found holding official documents of domestic workers unlawfully.

Acting Undersecretary for Emiratization Affairs and Assistant Undersecretary for Labor Affairs Ayesha Belharfia stated that the ministry addressed 81% of complaints while 19% were referred to courts in 2022.

She asserted that MoHRE is focused on safeguarding employers’ and employees’ rights because the UAE’s position as a premier location for living, investing, and working is reinforced by strong regulations that comply with international labor agreements.

The ministerial resolution said that wages should be paid through WPS. It is a payment system through authorized payment institutions. The failure was discovered during the direct inspection of the institutions.

Last year, more than 12,000 companies were fined during an inspection conducted in the private sector. The Ministry of Human Resources and Emiratisation regularly monitors the institutions registered in its database through field visits.

As per the new WPS law, companies must pay wages within a period of 10 days from the registered payday according to the wages protection system (WPS). If a company defaults on payment, the ministry will stop granting it any additional work permits starting from the 16th day of delay.

If a company delays wages for a month from the due date, the ministry shall inform the judicial authorities and other related parties to take all necessary punitive measures against it. Additionally, the ministry will halt other companies owned by the same employer and forbid any upcoming projects by the same owner.

Administrative fines could be Dh5,000 per worker, up to a maximum of Dh50,000 when multiple workers complain about deferred wages for more than 60 days.

If the company promptly pays the wages during the first month, the ministry would lift the work permit ban, but the ban lasts for 60 days if it fails to pay wages for more than two months.

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