Changes to the UAE Wage Protection System (WPS)

What does WPS mean?

The Wage Protection System (WPS) is an electronic salary transfer system that requires all companies to pay employee salaries via banks, UAE Exchange, or registered financial institutions. The system, developed by the Central Bank of the UAE, allows the Ministry of Human Resources and Emiratisation to create a database that records wage payments in the private sector to guarantee the timely and full payment of agreed-upon wages. The WPS covers all institutions registered with the Ministry across all sectors and industries.

Does your company need to comply?

1. All companies with an onshore presence and are registered with the Ministry of Human Resources and Emiratisation must comply
2. The company must have a bank account with one of the banks operating in the UAE
3. The company should enter into a contract with their bank or UAE Exchange approved and authorized by the Central Bank of the UAE to process the salary payments
4. Employee salaries must be paid via WPS within two weeks of their due date, or on the dates specified in the work contract if salaries are paid more frequently than monthly
5. Employee salaries that are paid should not be less than what is stated on their labour contracts

Consequences of failing to comply with WPS

Further to a decree that has been issued recently by the Ministry of Human Resources and Emiratisation, any company that is not compliant will receive a block on their license which will affect their ability to process any new visa applications. There will also be a fine imposed on the company based on the number of employees and extent of the delay in paying the employees. The fines that are imposed can be up to a maximum of AED 50,000/-

Making amendments to employee Labour Contracts 

The Ministry of Human Resources and Emiratisation requires that the salaries that are paid are not less than the figure stated on the employee labour contract. Should there be a discrepancy with payments you are currently making, it is possible amend the employee labour contract to reflect the

How we can assist you with the set up

If the company does not have a local bank account, Links Group can assist you with facilitating the salaries of your employees on your behalf . This will be done in conjunction with the company and we would register your company with UAE Exchange and each month the necessary SIF file is prepared and remitted with the required funds to ensure that the salary is paid by the 27th of every month.

We have a dedicated Labour and Immigration department on hand to assist with WPS set up and employee labour contract amendments. Contact the team to find out more.

Article by Deepa Rajesh on Dec 13th 2016
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