The UAE’s new wage protection scheme, which aims to ensure that employees receive full salary payments on time, comes into force today.
The decree was launched by Saqr bin Ghobash Saeed Ghobash, Minister of Human Resources and Emiratisation, and has been under process for some time. And starting from today, organisations will have to adhere to the new scheme.
So what does this mean for you, as an employee? Well, if you work in a company that employs 100 people or more, your salary now has added protections. The decree says that companies must pay their workers within a period 10 days or below from the registered payday in the Wages Protection System (WPS), the system that the ministry will use to track wages.
If a company fails to make payments within that 10 days, the ministry will stop issuing work permits for that company – starting from the sixteenth day of non-payment.
The punishments get more severe the longer a wage payment is delayed. If a company fails to pay wages for over a month, the ministry will inform the judicial authorities to take punitive measures against the company. The ministry can also freeze other companies owned by an employer that isn’t paying salaries.
Going further, if payments still haven’t been made, the ministry will seek measures to use the company’s bank guarantee. Administrative fines of AED 5,000 per worker with a delayed wage will then apply. These fines can go up to AED 50,000 if multiple workers complain about wage payments that are 60 days late.
Certainly this is a positive step forward for wage protection in the UAE. However, the traditional financial advice holds true – stay on top of your finances and ensure that you only borrow what you can afford.
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