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ISSUE 2
“By streamlining salary disbursement, WPS minimizes the effort needed by companies to manage employee salaries.”
to the WPS online database, the WPS agent sends the SIF to CBUAE and MOHRE (if the company is located onshore) for approval. Upon receiving approval, the WPS agent oversees the salary transfer to employees. The benefits of WPS extend not only to employees but also to companies. By streamlining salary disbursement, WPS minimizes the effort needed by companies to manage employee salaries. Furthermore, abiding by WPS and its requirements enables companies to build trust between themselves and their workforce, which may lead to lower turnover rates and higher levels of productivity - both of which are key to a company’s growth. Recent Reforms WPS has seen numerous reforms since its inception, with the most recent being brought about through the issuing of Ministerial Decision No.598/2022 Concerning the Wage Protection System (“Decision No.598/2022”) on 20 December 2022. Decision No.598/2022 introduced key changes regarding the repercussions companies may face for failing to pay employee wages by their due date. Under the now repealed Ministerial Resolution No.346/2022 Regarding the Amendment of Certain Provisions of Ministerial Resolution No.43/2022
Regarding the Wages Protection System (“Resolution No.346/2022”) , the following penalties were imposed: 17th day following the due date : Offending companies will not be issued new work permits, significantly affecting their ability to recruit new employees. For companies with more than 50 employees: companies will also be listed in the electronic monitoring and inspection system & inspection visits schedule and face subsequent inspection. 30th day following the due date : For offending companies with more than 50 employees, the public prosecution will be notified, and the company’s information will be sent to the relevant federal and local authorities for legal action. 4 months following the due date : The work permit ban will extend to other companies exclusively owned by the offending company’s owner. For repeating violations within 6 months : The offending company will be downgraded to category (3) in accordance with Ministerial
resolution No.209/2022 On the Classification of Establishments Under the Third Category.
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