Paying your employees on time

One of the employer's legal obligations is to pay salaries within 10 days following the usual salary payment date. The United Arab Emirates invests heavily in workers' well-being in order to retain them in the country. In recent months, workers have been among the country's authorities' top priorities. Several decrees aimed at protecting workers' rights have been issued. Recruitment, remuneration, housing and health. The Ministry of Human Resources and Emiratisation (MoHRE) recently firmly reminded private-sector companies to commit to paying their employees' salaries within the prescribed deadlines in order to avoid any penalties.

What is the WPS?

For mainland companies, salaries must be paid through the Wage Protection System (WPS). The WPS was established in 2009. It is an electronic system that guarantees the timely payment of salaries. Private-sector companies registered with the ministry must open an account with a bank in the UAE. The WPS authorizes the bank or the employer's agent to pay salaries to employees, after which the bank transfers the salary to the employee's bank account. More information about our HR services is available here. Salary transfers may be made through banks, exchange offices and approved financial institutions authorized to provide this service. All private companies registered with the ministry must join the WPS, and those that do not will be refused any new work permits until the salaries have been paid in full.

Fines and penalties

According to the official website of the United Arab Emirates government, all private-sector companies will be penalized for failing to pay salaries on time. A salary is considered "late" if it is not paid within 10 days following the due date. For example, your salary is usually paid on the last day of each month. Your employer is required to pay your salary within the following 10 days, that is, before the 10th of the month. After that, your employer is subject to penalties and sanctions. Here is a list of the sanctions employers may face.

Do not even consider WPS fraud

When we refer to WPS fraud, we mean: - Entering incorrect data into the WPS system for evasion or circumvention purposes: a fine ranging from AED 5,000 per worker to AED 50,000 if several employees file complaints. - Failure to pay by the due date through the WPS: AED 1,000 per employee. - Forcing employees to sign false payslips showing that they received their salaries: AED 5,000 per employee.

Late payment of salaries

Companies employing more than 100 workers

- If salary payments are delayed by more than 60 days, the employer will be fined between AED 5,000 per worker and AED 50,000 if several employees file complaints, - Employers will no longer be able to receive new work permits from the 16th day following the date of the delay. - Companies that delay salaries by one month will be referred to the judicial authorities for punitive measures. - Measures will be taken against all companies belonging to the same owner. - The owner will be unable to register a new company. - Employees' bank guarantees will be liquidated. - Workers will be authorized to work for other companies.

Companies employing fewer than 100 workers

- If the company commits the violation more than once a year, the MoHRE will apply the sanctions provided for companies employing more than 100 workers. - Employers will no longer be able to receive new work permits - Fines - Referral to court. The decree clearly states that the ministry must not conduct any transactions with companies that have not registered with the WPS. If your company is not up to date with the WPS, we invite you to contact us so that we can check with you whether all the legal obligations applicable to your company - there are now 8, including auditing, VAT, ESR notification, etc. - are being properly fulfilled.