The Ministry of Labour (MOL) recently announced its proposals to introduce heavy fines for onshore companies employing 100 staff or more who fail to comply with the Wages Protection Scheme (WPS). It would appear that smaller companies are not exempt from reproach either.
Introduced by the Dubai Government in 2011, the WPS is an electronic salary transfer system which enables the MOL to safeguard the regular payment of employee salaries. On implementation, it applied only to businesses operating onshore in the UAE, but now has a far broader reach.
Even if the number of employees engaged by a company is less than 100, onshore businesses which fail to pay salaries via WPS for 3 months after issuance of their first employee’s residency visa will be liable to a penalty of AED 10,000. Until the penalty is paid, the MOL will not process any further visa applications, including cancellations.
Registration of the company with the WPS is straight-forward and can be completed through the company’s local bank or a UAE Currency Exchange by providing the following documents/information:
To register the Company’s employees for payment of their salary through WPS, the company should submit to its bankers or a UAE Currency Exchange, a copy of the following documents/information:
Salaries must be paid in AED on a monthly basis. Any deductions from the monthly salary should not exceed 10%. In the event of any delay/non-performance of this requirement or deductions of more than 10% of an employee’s monthly salary, the company’s labour and immigration file will be blocked pending full compliance.
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