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UAE's wage protection system: Employee rights, fines for violators explained

Violation by employer can attract penalties upto Dh50,000



File
File

By A Staff Reporter

Published: Thu 27 Jan 2022, 8:39 AM

The UAE is home to expatriates from over 200 countries, which contribute to economic development and the young nation's progress.

The UAE government's Wage Protection System (WPS), which has made payments and wage distribution easier and transparent, is extended to domestic workers, starting today.

Initially, the mechanism was launched in 2009 and later further strengthened in 2016.

The pioneering policy was developed by the UAE's Central Bank and the Minister of Human Resources and Emiratisation (MoHRE).

The policy reflects the UAE's pioneering role in safeguarding the worker's wage and enhancing transparency and competitiveness to strengthen the work relationships in the country.

The WPS covers all registered institutions with MoHRE across industries.

What are the objectives of WPS

  • A firm commitment to secure employee's salaries
  • Secure employer's interests
  • A mechanism that will reduce the time and effort required to pay employee’s salaries
  • Bid to improve job security in the private sector, and inculcate better relationships and rights protection of employees and employers
  • Transparent and easy-to-use payment system
  • An updated database for the Ministry of Labour
  • A step towards reducing labour disputes associated with wages

Who are the stakeholders?

Employees, employers, banks and agents such as other financial institutions, bureau de change, which the UAE Central Bank authorises salary payment via WPS, are the primary stakeholders in the process.

How can employers register?

Employers in the private sector can easily register for the WPS. On the MoHRE official website, the entire system is available where employers can register their accounts using the company information that the Ministry provides. Employers can login to their accounts and update the list with -

— Bank account information.

— Employees list with details of the bank/agent the company works with.

— The agent/bank an employee has an account with.

— The date on which the salary needs to be paid.

What are the penalties for violation of WPS?

— Entry of incorrect data in the WPS for the purposes of evasion or circumvention - Dh5,000 for each worker and a maximum limit of Dh50,000 in case of multiple workers.

— Failure to pay on due dates through the WPS - Dh1,000 per employee.

— Forcing employees to sign fake pay slips showing that they received their salaries - Dh5,000 per employee.

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joydeep@khaleejtimes.com


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