Wage Protection System in UAE — Update (Ministerial Decision)

By Roxana Maroun

Background

After the UAE ministerial decision No. 598/2022 concerning the Wages Protection System (“WPS”) came into effect, Employers/Establishments were prohibited from arbitrarily delaying or abstaining the payment of wages.

The said decision required all Employers/Establishments enrolled with MOHRE to pay their Workers on their due date through the WPS approved by the Ministry, or any other systems prescribed in this regard, and to provide all evidence required to prove the payment of wages of their Workers.

The exempt categories

The above-mentioned Decision excludes the following from the purview of the WPS:

• A. Certain categories of Workers:
• 1. The Worker with a wage-related labor complaints referred to the judiciary.
  2. The Worker against whom an absconding report has been filed.
  3. The new Worker within a period of (30) days from the due date of payment of the Wage.
  4. The Worker who is on leave without pay during that leave period; provided that the evidence required by the Ministry is submitted in accordance with the due process.
  5. Seafarers working on board ships through a request submitted by the Establishment.
  6. Foreign Workers working in foreign Establishments or their branches inside the State who receive their Wages outside the country, after the approval of the Workers and through a request submitted by the Establishment.
• B. Certain Establishments that carry out the following activities:
• 1. Fishing boats owned by individual citizens.
  2. Public taxis owned by individual citizens.
  3. Banks
  4. Places of worship.

Implementing the procedures

The Employers/Establishments are required to pay the wages of Workers on the due dates as set out in the Employment Contract. In the event a Worker is granted leave without pay for any period, the Employer/Establishment is required to notify MOHRE. The Worker’s wage shall become due starting from the first day of the month following the end of the period based on which the wage is set in the Employment Contract. If this period is not specified in the Employment Contract, the Worker’s wage shall be paid at least once every month.

Consequences of defaulting

Unless the Employment Contract provides a shorter period, the Employers/Establishments who fails to pay wages within the first 15 days from the due date, shall be considered late, and the following actions shall be taken:

1. The Employers/Establishment shall be followed up electronically to ensure its commitment to paying the Wages of its Workers, by the due date.
2. The Employers/Establishment shall be notified of its default, in the third and tenth days following the due date.
3. In the seventeenth day following the due date, the work permits for the Employers/Establishment shall be suspended and the defaulting Employer/Establishments shall be listed in the Electronic Monitoring and Inspection System and the schedule of inspection visits (in case the Establishment is employing 50 and more Workers).
4. One and a half months after the due date, the concerned Public Prosecution shall be notified and its data shall be transferred to the competent authorities at the Federal and local levels to take legal measures and conduct follow-up by the competent teams in the MOHER (in case the Establishment is employing 50 and more Workers).

Furthermore, If the Employer/Establishment repeats the same violation within six months, an administrative fine shall be imposed, and the Establishment shall be reclassifyed into the third category in accordance with the Ministerial Decision No. (209) of 2022. The classification of the establishments under the third category, happens in the event of committing one or more of the above-mentioned violations. However, the Establishment shall not be reclassified under the category that it qualifies for according to the standards of classification approved at the Ministry, until after termination of the classification under the third category, and upon rectification and adjustment of all violations committed thereby, in addition to the payment of the due fees and fines.

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