A complete guide to the Wage Protection System in the UAE
The UAE is home to expatriates from more than 200 countries, contributing to economic development as well as the overall progress of the country. To make payments and wage distribution easier, the government of the UAE has launched the Wage Protection System (WPS). Let’s find out what WPS UAE is, how it works and all related information.
WHAT IS WAGE PROTECTION SYSTEM OR WPS IN THE UAE?
Launched in 2019, the WPS UAE was developed by the Central Bank of the UAE and the Ministry of Human Resources and Emiratisation or MoHRE. Wages Protection System UAE is a state-of-the-art electronic salary transfer system that enables organisations in the private sector to pay an employee’s wages through banks, approved financial institutions, and bureau de change.
The Ministry of Human Resources and Emiratisation (MoHRE) offers private sector companies a reliable database to create salary files for their workforce. Companies have to send these files to their respective banks for wage distribution to employees. Each file holds crucial information about the salary of the employee based on their contract, allowing MoHRE to ensure that all employees’ dues are paid.
GOALS AND OBJECTIVES
This massive database ensures timely payment of agreed-upon wages. The Wage Protection System UAE covers all institutions registered with MoHRE across various businesses in multiple industries. The system is aimed at offering services to a wide category of employees in the private sector. Some of its main goals are:
- Solid commitment to safeguarding employee’s salaries.
- Safeguard employers’ interests and provide a seamless system to reduce the time and effort required to pay due wages and salaries.
- Improve job security in the private sector in the UAE and work towards strengthening work relationships and protecting the rights of both employees and employers.
- Provide a transparent and easy to use payment system.
- Offering a reliable database for the UAE Ministry of Labour that’s regularly updated on new wages data in the private sector.
- Proactive in providing protection to employees and reducing labour disputes associated with wages.
WPS STAKEHOLDERS
There are various stakeholders that the Wage Protection System in the UAE targets, they include:
EMPLOYEES OR WORKFORCE
Any individual under the payroll of an organisation operating in the private sector who works in return for an agreed upon wage. The employee must possess a valid labour card issued by MoHRE.
EMPLOYERS
The owners of an organisation in the private sector in the UAE registered with MoHRE and WPS.
BANKS
This includes any bank where the employer has a bank account with and the company relies on the bank account for wages transfer to all employees under its payroll.
AGENTS
It includes any banks, bureau de change or any other financial institution approved and authorised by the Central Bank of the UAE to offer salary payments through WPS system UAE. The Central Bank regularly updates its list with names of approved and authorised agents.
Now, let’s find out how the system works and how to register with WPS in the UAE.
WPS REGISTRATION PROCEDURE FOR EMPLOYERS IN THE UAE
Employers in the private sector can easily register for the Wages Protection System in the UAE. The entire system is available on MoHRE’s official website where employers can register their account using their company details provided by the Ministry. Employers can then login to their account and update the lists with:
- Bank account details.
- List of employees with details of the bank or agent the company works with.
- The bank or agent an employee has an account with.
- The specific date at which the salary needs to be paid.
Please note that according to the MoHRE guidelines, “Salary month cannot have a difference of more than one month from the dates chosen to pay the salary”. Furthermore, the guidelines also suggest, “whenever an employee joins or leaves a company, you will need to download a new employee list and attach to the application.”
WPS PAYMENT PROCESS
After a company has successfully registered an account, the next step is to proceed with the payment process by ensuring the following steps are complete:
- The employer has to open a bank account with an approved bank or agent if it does not already have a UAE-based bank account.
- The employer has to sign a WPS agreement with the bank or agent.
- The employer can issue salary transfer instructions to the bank or an agent.
- The bank or an agent notifies the Wages Protection System in the UAE, which sends employees’ details, wages and salary transfer instructions through an electronic system to the UAE Central Bank.
- The UAE Central Bank then forwards all the details to MoHRE for cross-checking.
- WPS issues an authorisation to the employer’s bank or agent to pay the employee wages. The bank then transfers the salary to the employee’s bank account.
HOW TO WITHDRAW YOUR SALARY FROM WPS UAE?
Here are the different ways to withdraw your salary from WPS in the UAE.
WITHDRAWAL THROUGH WPS CARD
Employees without a relevant bank account can opt for a WPS card in the UAE to withdraw their salaries. Companies registered with WPS can access money exchanges in the UAE, offering cost-effective WPS-compliant payroll services. These exchanges provide fund transfer facilities and salary disbursement to employees. The WPS card is also issued by the exchanges. The card can be used at different locations across all emirates.
THROUGH AN ATM MACHINE
Employees with a registered bank account in the UAE can use their ATM card to withdraw their salary.
WPS PENALTIES ON COMPANIES FAILING TO PAY EMPLOYEE WAGES
WPS in the UAE has some strict penalties to prevent companies from withholding employee wages. Here’s a list of penalties that a company might face for non-payment of dues.
PENALTIES FOR ENTERPRISES EMPLOYING OVER 100 EMPLOYEES
If a small to medium-sized private sector firm in the UAE, with over 100 employees, fails to pay employee dues within a period not exceeding 10 days, they are liable to these penalties:
- The company will not get any work permits starting from the 16th day from the date of delay in wages.
- Companies that have delayed wages for more than a month from the due date will be referred to the judicial authorities for further punitive measures.
- If the company owner has other registered companies with WPS in the UAE, similar penalties will apply to all of them.
- The owner(s) will not be able to register any new company.
- Employees’ bank guarantees will be liquidated.
- The company will face downgrading to the third category.
- Workers will be permitted to find other job opportunities.
If the wages are delayed for over 60 days, a fine of AED 5,000 per employee (whose wage has been delayed) will be charged up to a maximum fine of AED 50,000 for multiple employees.
WPS PENALTIES FOR COMPANIES WITH A WORKFORCE OF FEWER THAN 100 EMPLOYEES
If a small to medium enterprise with less than 100 employees fails to pay employee salaries within 60 days from the due date, then they are liable to penalties that include:
- Barred from issuing work permits.
- The company will be liable to fines by MoHRE.
- Referral to court for further proceedings.
If the company fails to pay wages twice in one year, MoHRE will apply the same penalties mentioned for bigger firms with more than 100 employees.
FREQUENTLY ASKED QUESTIONS?
IS IT EASY TO GET A JOB IN DUBAI?
Getting a job in Dubai is not particularly different from applying for work in any other country. Just ensure to follow the relevant regulations and apply for jobs that best suit your academic qualifications, work experience and skill set.
WHAT ARE THE TOP JOB SITES IN DUBAI?
Some of the best job searching sites in the UAE are Bayt, Linkedin, Indeed and more. These online job portals have a range of job opportunities open to everyone.
This concludes our detailed guide to WPS UAE, along with the registration process, penalties and salary withdrawal for employees. If you would like to file a complaint regarding any workplace disputes, check our post on how to check labour complaint status.
The guide includes all the crucial information about filing a complaint, tracking and resolution. For more services and permits, visit the Taw-seel mobile service centre. Other services of the Ministry include Tasheel and Tadbeer. Those looking to hire domestic workers in Dubai should contact Tadbeer service centres.