UAE PRIVATE SECTOR SALARIES: The UAE has come up with a new wage system, which might prove to be a big relief for the private sector. A new ministerial resolution has stated that the UAE’s private sector will receive their wages starting from the first of every month, starting June 1, or they will be deemed to have been paid late. The resolution was issued by the office of the Minister on May 12, and it states that the “first day of each Gregorian month” is the single due date for workers’ wages for the previous month in private sector establishments.
What is the new Wage Protection System?
The payments must be made via Wage Protection System (WPS) or other systems introduced by the Ministry for such payments, and establishments must provide records and data to substantiate the payment of wages to workers.
The Wage Protection System (WPS) mandates payments of salaries in the private sector to be made via banks, exchange houses or financial institutions which are approved by the Central Bank of the UAE.
Who designed the new wage system for the private sector?
The system was designed to allow MOHRE to keep a complete database of wage payments and be able to monitor the employers’ compliance in making timely and full payments. Wages can be in the form of UAE Dirhams or other currency as agreed by the employer and employee in the employment contract.
Under the UAE Labour Law, there is no minimum salary that is prescribed by the law, but the law also has general provisions mandating that the salary be enough to provide for employees’ basic needs.
UAE New Wage Protection System: What Happens If The Salaries Get Delayed?
The Ministry will electronically supervise the establishment to ensure compliance, and in the case that payment is not confirmed within the deadline, it will send notifications and alerts to the non-compliant establishment.
On the fifth day after the deadline, the Ministry will prevent the issuance of new work permits from the establishment, while informing the owner of the reason behind such prevention and warning him about paying.
On the eleventh day after the deadline, the Ministry will impose the administrative fines set forth by Cabinet Resolution No. (21) of 2020 and reclassify the establishment as the third category according to Ministerial Resolution No. (209) of 2022.
On the sixteenth day after the deadline, a labour dispute of individuals or collectively for those workers will be registered automatically.
Who needs to follow the new rules?
It can be applied to organisations that employ 25 or more workers, according to the relevant regulations of the Ministry, or organisations belonging to the same employer, in which the total number of workers who have not been paid their wages exceeds 25, depending on the particular sector.
The Ministry can also take an executive action to recover the unpaid wages of workers in organisations that employ less than 50 workers on the 21st day of the due payment date of the wage, or initiate labour dispute procedure on the same day for organisations that employ 50 or more workers.
With 13 years on the line, Ashish Kumar Singh loves everything when it comes to movies, music, travel and pop culture. Formerly employed at ANI, Pinkvilla, India Today and HT, Ashish has interviewed some of the top celebrities of India, including Shah Rukh Khan, Aamir Khan, Ranveer Singh, Ranbir Kapoor and Hrithik Roshan, among others. Breaking news excites him and deadlines are what he chases. Interviewing comes naturally to him. Hit him up at ashish.kumar02singh@gmail.com.
