UAE decree: UAE to act tough on firms that delay wages

Abu Dhabi - According to the decree, the ministry will neither process any transactions nor deal with the owners of the companies that are not registered with the Wage Protection System (WPS) until they register in the system.

From October this year, companies which don't pay the wages to the employees even 10 days after the due date will have to face punitive actions, according to a new decree issued by the Ministry of Human Resources and Emiratisation.
The decree, which will be effective from October 2016, aims to ensure employees' wages are fully paid within a period not exceeding 10 days from the due date.
According to the decree, the ministry will neither process any transactions nor deal with the owners of the companies that are not registered with the Wage Protection System (WPS) until they register in the system.
Saqr bin Ghobash Saeed Ghobash, Minister of Human Resources and Emiratisation, pointed out that companies employing over 100 workers must pay wages within a period not exceeding 10 days. If they fail, the ministry will stop issuing them any additional work permits starting from the 16^th day from the date of delay.
"Two main things should be considered in this matter, firstly, salary delays occur usually if the company fails to pay wages a month from the due date, and 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," he said.
The decree states, if a company delays wages a month from the due date, which means the company has entered into the refrainment phase, the ministry will inform the judicial authorities and other related regulators to take all necessary punitive measures against it, causing a complete strike against the other companies owned by the same employer, along with prohibiting him from registering any new company.
If a company continues to delay wages of its employees, the ministry will take needed measures to use the bank guarantee, in addition to downgrading the company to the third category and allow the workers to move to other companies.
"If the company fails to pay wages for 60 days from the due date, then penalties will be imposed, not forgetting the punishments that had been already slapped for failing to pay wages a month from the due date," Ghobash added.
A fine of Dh5,000 per worker's delayed wage will be imposed which could go up to a maximum of Dh50,000 in cases that include multiple workers complaining about delayed wages for over 60 days.
The ministry will lift the ban of violating companies and grant them the ability to apply for new work permits only if they immediately pay delayed wages during the first month of delay, while the ban lasts for 60 days after payment of wages, for companies that failed to pay wages for more than two months.
The decree reiterates that if the company often refrains from paying salaries, the ban duration doubles after paying the wages.
Additionally, if the ministry came across any sorts of salary delays or violations by companies that employ less than 100 workers, the current regulations will apply, from work permits ban to fines and public trial referral, if the company fails to pay the money within 60 days. However, if the company commits such violations more than once in one year, the ministry will apply penalties stated for companies that employ over 100 workers.
A senior manager at a leading construction company said several companies have sent their workers on up to six month leaves and these people do not reflect in the ministry's data. Hence, the companies are deemed violators, as the rule says that 80 per cent of the workforce must be paid through WPS .
Seeking clarification on the issue, he feared many leading construction companies may face penalties.
The new rule
From October, the Ministry of Human Resources and Emiratisation will not issue new work permits to companies which fails to pay wages 10 days after the due date.
If a company delays wages for more than a month, judicial authorities will be informed and action would be taken against all companies owned by the same owner.
A fine of Dh5,000 per worker's delayed wages will be levied if wages are not paid for over 60 days.
A ban on issuing new work permits will be continued for 60 days after paying the wages, when the company fails to pay wages for two months.
haseeb@khaleejtimes.com