Every month, employees must receive their salaries via the Wage Protection System by the 15th.
In an update to the WPS, the Ministry of Human Resources and Emiratization (MoHRE) issued Ministerial Resolution No.43 of 2022.
According to Nazar Musa, the CEO of PRO Partner Group, a UAE company services provider, the update includes amendments to specific requirements and clarifications about businesses' obligations to comply with WPS.
Last week, Dr Abdulrahman bin Abdulmanan Al Awar, Minister of Human Resources and Emiratisation, issued a ministerial resolution detailing administrative procedures against non-paying establishments.
How does the WPS work?
The Wages Protection System (WPS) allows institutions to pay wages electronically through banks, bureaus de change, and other financial institutions.
Is it possible to list the main changes made to the existing WPS?
A number of other important requirements for employers in the private sector are outlined in the resolution:
The WPS must be used to pay all employee salaries on time
The company may be blocked from the system on the 17th of the following month if salaries are not transferred by the 15th of the month
The WPS will provide employers with a 30-day grace period for transferring salaries to new employees
Companies in the UAE have been forced to review their salary and payroll processing procedures immediately to ensure they comply with the new rules, Musa said.
How will these changes affect UAE employees? Is it beneficial to them?
In the UAE, these changes ensure that employees are paid accurately and on time, further strengthening their protections.
According to Musa, WPS has been successful in the UAE in protecting employee rights and ensuring payroll is processed accurately each month.
Additionally, the new system allows employers a 30-day grace period to onboard new employees onto the WPS system and ensure that they are properly set up in the system for payouts through WPS," he said.
WPS was installed for what purpose?
As part of the UAE's labour regulations, the WPS is an integral part. This system ensures that employers meet their obligations to pay their employees promptly and that workers' rights are protected.
The Ministry of Human Resources and Emiratisation (MOHRE) and the Central Bank of the UAE established it in 2009.
The MOHRE uses it to keep a record of private sector salary payments in order to identify employers who fail to pay their staff on time. It is essentially an electronic wage transfer system that monitors and oversees the payment of worker salaries in the UAE.
What is WPS?
Employees' labour file numbers are associated with their work contracts in MOHRE. Employee bank accounts must be used to clear all payments, which is linked to the Central Bank.
In order to ensure that the employee receives the correct amount, the WPS system will match the registered salary level on their work contract.
A company that pays less than the registered salary level on its MOHRE work contract will be blocked from the MOHRE network, and it must resolve the payment issue.
If the issue remains unresolved, what happens?
Unresolved blocks will result in fines and a Labour court case if salaries are not correctly paid.
"The WPS system in the UAE ensures correct and timely payment of employees. In the UAE, the system ensures employees' rights are respected and payroll is processed correctly each month," Musa said.