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Wages Protection System (UAE)

  • Responsible Organisations: Ministry of Labour of the United Arab Emirates (UAE) (Government); Central Bank of the UAE (Government)
  • ILO Regions: Arab States
  • Country(ies): United Arab Emirates
  • Thematic areas: Protection
  • MLFLM: 8.; 9.(a),(b),(c); 11.

Description

The Wages Protection System (WPS) is an electronic salary transfer system that allows institutions to pay workers┐ wages via banks, bureaux de change, and financial institutions approved and authorized to provide the service.

The WPS technique was developed by the Central Bank of the United Arab Emirates (UAE) in a manner that allows the Ministry to have a database on the procedure of private sector employers paying wages to the worker and the compliance of institutions with the system.

As per the Ministerial Resolution 788 of 2009, the wages of the workers are supposed to be transferred via the Wage Protection System in accordance with the deadlines stipulated in the law. The law requires that the company is registered with the Ministry of Labour for the WPS to apply.

The WPS allows for transparency in salary payment to workers including foreign workers, and thus addresses the issue of non or delayed payment of salaries to (foreign) workers. It was introduced in 2009 to workers whose work permit is issued by the ministry of labour, and gradually roled out. As of October 2015, approximately 3.5 million foreign workers (of the 4.6 million migrant workers registered with the Ministry of Labour) benefit from the WPS.

In the event that the company fails to enroll in the WPS with the Ministry or does not transfer the wages on time as specified in the law, it will be denied new work permits until all outstanding payments have been settled. In addition, companies that delay payment of wages for more than one month of the due date will be denied the right to have new work permits, along with all the institutions belonging to the owner of the violating institution, and all those responsible for violations will be referred to the court, in accordance with Ministerial Resolution No. 788 of 2009.

The WPS by the UAE was the first of its kind in the Arab world and reflects the UAE┐s pioneering role in the region to address conditions of work of foreign workers. An overview of the system was well received during the 3rd ministerial meeting of the Abu Dhabi Dialogue and some other GCC countries are in the process of emulating the system. Strong points of the WPS include the following:

1. Reiterating the commitment to protect workers┐ wages;
2. Providing innovative solutions that help employers safeguard their own interests and reduce the time and effort needed to pay workers┐ wages and offer employers a clear track record of salary payment which enables them to demonstrate compliance with the labour law and safeguard their interests in case of labour disputes;
3. Taking serious steps to improve job security in order to strengthen work relationships in the UAE and safeguard the rights of all parties concerned;
4. Entrenching transparency and competitiveness;
5. Ensuring that the UAE Ministry of Labour is regularly and constantly updated on wages data in the private sector in order to guarantee that employers fulfill their salary obligations; and,
6. Taking protective and proactive measures to reduce labour disputes pertaining to wages.

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last updated on 18.07.2016^ top