UAE: Ministry announces amended penalties for firms that don't pay salaries on time

New amendments made to the UAE’s Wages Protection System (WPS), specify a series of administrative procedures against establishments that do not pay workers’ salaries on time. 

The penalties would depend on the duration of the delay in paying workers’ salaries, the size of the establishment, and the number of employees that have not been paid.

This came as Dr Abdulrahman bin Abdulmanan Al Awar, Minister of Human Resources and Emiratisation, issued a ministerial resolution.

The resolution stipulates that the Ministry of Human Resources and Emiratisation (MoHRE) will monitor establishments registered in its database, regardless of size, to ensure salaries are paid on time. This will be done through field visits and electronic monitoring.

The ministry will issue reminders and notifications to non-compliant establishments. If no action is taken, the issuance of new work permits for such establishments will be suspended.

The amendments include procedures that will be taken “gradually” against errant establishments that employ 50 people or more. The ministry will notify the public prosecution and send the establishment’s details to the “relevant local and federal authorities for further legal action”.

“All non-compliant establishments regardless of size, that fail to pay wages four months after the due date will face a suspension on new work permits. If the owner operates other establishments listed with the WPS in the UAE, similar penalties will apply to each of them. This will be done after notifying the affected establishments about the suspension of work permits,” the ministry said.

If the establishment repeats the same violation within six months, an administrative fine will be imposed and the establishment will be downgraded to tier three under the MoHRE’s classification system.

Exemptions

The amendments also allow establishments to submit requests for exemption from transferring their wages through the WPS in two new cases: Sailors working onboard vessels/ships, and workers of foreign establishments or their subsidiaries operating in the country who receive their wages from outside the country, subject to the workers’ consent.

These cases are in addition to the previously exempted cases, which are fishing boats owned by UAE nationals, public taxis owned by UAE nationals, banks and places of worship.

Khalil Al Khoori, acting undersecretary for Human Resources Affairs at the MoHRE, said the resolution aims to enhance long-term balance and stability of the relationship between employers and employees. “Primarily, it focuses on compliance with the wages deadlines and amounts agreed upon in those contracts,” he explained.