UAE wage protection decree comes into force

Ministerial decree ensures full and punctual payment of employee salaries

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A UAE decree designed to ensure that employees are paid on time and in full came into force on Monday.

The wages protection decree was launched by Saqr bin Ghobash Saeed Ghobash, Minister of Human Resources and Emiratisation, according to the UAE state news agency WAM.

Maher Al Obed, Assistant Undersecretary for the Inspections Sector, said the decree would safeguard employees while keeping business owners’ interests in mind.

“Salaries paid on time is a major contribution towards labour rights protection which is highly recognised by the UAE,” Al Obed said.

“We value such decisions as it promotes labour relations which in turn secures a balanced labour market productivity, and eventually turns out with positive outcomes for both labourers and employers.”

The decree highlights companies employing over 100 workers. Such companies must pay wages within a period not exceeding 10 days from the registered payday in the wages protection system (WPS).

If they fail, the ministry will stop granting them any additional work permits starting from the 16th day of delay.

If a company delays wages a month from the due date, which means the company has entered into refrainment period, the ministry shall inform the judicial authorities and other related parties to take all necessary punitive measures against the violating company, WAM reported.

The ministry will also halt other companies owned by the same employer, plus forbid any upcoming projects foreseen by the same owner. If a company continues to refrain from paying wages, the ministry shall take necessary measures to use the company’s bank guarantee, then slapped by a downgrade to a third category company, plus enable their workers’ mobility options to other companies.

“If the company fails to pay wages for 60 days from the due date, then administrative fines shall follow, in addition to registered fines for failing to pay wages a month from the due date, as stated above in the first scenario,” Al Obed added.

Administrative fines reach AED5000 per worker’s delayed wage pay, stretching to a maximum of AED50,000 in events which include multiple workers protesting about deferred wages past 60 days, WAM reported.

The ministry lifts bans on violating companies allowing them to apply for new work permits only if they promptly paid deferred wages during the first late month, while the ban lasts for 60 days if companies fail to fund wages for more than two months.

According to the decree, companies that pay refrained salaries yet record such violations repetitively shall face a double-duration ban.

On the other hand, if the ministry notes salary delays or refrains by a company that employs less than 100 employees, the current regulations – which include penalties like a ban on work permits, fines and court referrals – shall apply where a company fails to pay wages within 60 days. If the company repeats such violations over the span of one year, the ministry shall apply penalties declared for companies hiring over 100 workers.

The decree states that the ministry shall not proceed with any transactions with companies that did not register in the WPS. In addition, owners of these companies would be kept aside until the registration in the WPS is completed.

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