Timely payment of wages improves the stability of work relations, the Ministry of Human Resources and Emiratisation said.
The Ministry of Human Resources and Emiratisation (Mohre) issued a decree
that introduces new penalties against employers who fail to pay wages on
time.
Moving forward, employers will be notified on the third and 10th day after
the due date for payment of wages before heftier penalties - including
suspension of new work permits, a notice to the public prosecution and
fines - are applied.
Employers with 50 or more workers will be subject to field inspections from
the ministry and warnings if wages are not paid 17 days after the due date.
For smaller establishments, the issuance of work permits will be suspended.
Penalties escalate with further delay in paying wages.
Dr Hasan Elhais legal consultant in Dubai said while the wage protection system
(WPS) has been in place in the UAE since 2009, the new resolution seeks to
implement stronger measures against non-payment of wages to ensure enhanced
compliance.
"If wages are not paid to employees within 15 days from the due date, the
employers will be considered late in paying, unless otherwise is specified
in the employment contract,” he said.
Under the new decree, an employee’s wage shall be due starting from the
first day of the month following the registered payday as specified in the
employment contract. If the due date is not mentioned in the employment
contract, workers must receive their wage at least once a month.
Elhais added that the new decree, which applies to all companies registered
with the ministry in the UAE, annuls the previous resolution No. 739 of
2016. "Therefore, rules and penalties stated in the new decree will apply
to violations related to late or non-payment of wages,” said Elhais.
All companies registered with the ministry have a three-month grace period
time to comply with the new resolution and avoid possible sanctions.
In a statement, the ministry urged all private companies and firms to pay
wages on time through WPS, an electronic salary transfer system that allows
institutions to pay wages via banks or exchanges and other approved
financial service providers. Other payment systems are approved for certain
free zones.
All companies and businesses registered with the ministry must sign up with
the WPS, which enables the ministry to monitor wage payment for the entire
private sector and, thus, ensuring timely and complete payment of wages.
They are also required to provide all supporting documents requested to
prove the payment of wages to their employees.
Timely payment of wages, the ministry said, improves the stability of work
relations and contributes to increased productivity in the employees, which
has a positive impact on the broader workplace in the UAE.
Applicable sanctions:
Lists of sanctions and fines that can be imposed against a company that
fails to pay wages on time:
- Third and 10th day after the due date: Companies will receive official
reminders to pay wages.
- 17th day after the due date: Issuance of new work permits will be
suspended. Companies with 50 or more employees will be subject to
inspections from the ministry and warnings.
- 30 days after the due date: Notification to be issued to the public
prosecution for the legal measures to be initiated against the company.
These measures will be initiated against companies employing 50 to 499
workers, firms with 500 or more workers and those that have been classified
as high-risk establishments by the ministry.
- 60 days after the due date: Issuance of new work permits is suspended for
the breaching establishment, as well as any other firm exclusively under
the same owner of the breaching establishment.
- For repeated non-compliance: In case a company repeats any of the
violations or accumulates more than one violation, then it can be subject
to inspections from the ministry, a downgrade to a lesser category and
fines.
- Three months after the due date: Requests for issuing or renewing work
permits shall be suspended. Company to be referred to public prosecution
and fined if an inspection visit after six months of non-compliance reveals
the absence of a work relationship.
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