UAE law guarantees the timely payment of salaries. For delaying payment of wages in the country, heavy fines and penalties are imposed.
MoHRE has issued a decree that imposes new penalties on employers who fail to pay their employees on time.
In the event wages are not paid 17 days after the due date for employers with 50 or more workers, the ministry will inspect the fields and issue warnings. The ministry will suspend work permits for smaller establishments. Further delays in paying wages will result in more penalties.
Here are the seven penalties introduced as per the new decree:
1. Official reminders: Companies will receive official reminders of their wage payment obligation after the third and tenth day.
2. Work permits will not be issued if wages are not paid after the 17th day following the due date. Those businesses with more than 50 employees can be inspected and warned by the Ministry.
3. Notice to the Public Prosecution: The public prosecutor is notified that more than 30 days have passed since a company has failed to pay wages, so that legal action may be taken against the company. Those measures will be imposed on companies with 50 to 499 workers, or 500 or more workers, or those classified by the MOHRE as high-risk establishments.
4. The suspension of work permits for businesses owned by the same breaching entity: This applies to all businesses who fail to pay wages for two consecutive months as well as the suspension of issuance of new work permits at the breaching establishment.
5. If a company is found to have repeated a violation or accumulated more than one violation, it may be subject to Ministry inspections, a downgrade to a lesser category, and fines.
6. Work permit renewal suspension: Company that fails to pay wages for a period of more than three months will not be able to renew a work permit.
7. Referral to Public Prosecution and fines: In case of non-compliance after six months of inspections and finding that there was no working relationship, the public prosecutor will be referred.