All employees must receive their salary through the Wage Protection System before the 15th of each month.
A new resolution has just been issued by the Ministry of Human Resources and Emiratisation. Ministerial Resolution No. 43 of 2022 updates the UAE Wage Protection System (WPS).
It includes new measures and updates regarding the scope of the system for private-sector companies to remain compliant with the authorities.
Reminder about the WPS in Dubai
As a reminder, the Ministry of Human Resources and Emiratisation (MOHRE) decided to implement a payroll processing system designed to facilitate payments and ensure the distribution of salaries to employees of privately owned companies registered in Mainland (this system does not apply to companies registered in a Free Zone).
Further reading:
What are the key new points of the resolution that employers need to know?
The main change introduced by this resolution concerns the minimum amount of an employee's salary that must be paid through the WPS. Previously, the employer had to pay at least 80% of the employee's salary, but under the new resolution, this amount has increased to 90%.
The resolution also highlights several other key points that employers are required to comply with:
- All employee salaries must be paid on the scheduled date through the WPS.
- If salaries are not transferred before the 15th of the month, the company will be blocked in the system from the 17th of the following month.
- Every month, 90% of salaries must be paid through the system to prevent the company from being blocked and subject to fines.
- A 30-day grace period will be granted to employers to pay salaries through the WPS for their new employees.
Measures to take to comply with the MOHRE
To be fully compliant with the authorities, company directors and their teams must ensure that the following requirements are met:
- At least 90% of all employees' salaries must be paid through the WPS.
- For all employees who have left the company but remain under their employer's sponsorship, their visas must be cancelled immediately or they must be placed on unpaid leave.
- Salary reduction agreements, for any reason, must be settled after payroll processing.
- The MOHRE only authorizes salary reductions for employees on unpaid leave, and the employer must request this "advance unpaid leave" through the MOHRE system, with an addendum to the contract signed by both parties.
- Only a deduction of 20% of the employee's monthly salary is permitted.
- WPS exemptions are only permitted for employees who are outside the country.
How do you register for the WPS?
All private companies registered in Mainland must register with the WPS. The following conditions must be met:
- The company must have a business bank account with a local bank;
- Have entered into an agreement with a bank, exchange office, or another UAE financial institution authorized by the Central Bank to make salary payments to employees;
- Cover all expenses related to the WPS, which may include bank fees and other institutional fees. Companies are not permitted to pass these costs on to their employees.
The changes introduced by this new resolution further strengthen employee protection in the UAE by ensuring that they are paid on time.
How can Merritt Middle East help you?
Our firm advises and assists you in complying with the authorities and the MOHRE.
Our team also assists you in implementing the WPS for your employees. Our HR package includes payroll and WPS management by our team of experts.
We are also experienced in company formation and residence visas for you and your employees.
If you need help, contact us by email at
support@merritt.group .
