What is WPS (wage protection system)?
The WPS was initially introduced in 2009 and later strengthened in 2016. In partnership with the Ministry of Human Resources, the Central Bank of the UAE developed the WPS, which facilitates electronic salary transfers for registered employers to be paid by authorized banks, bureaus de changes, and financial institutions. Until now, the UAE's Wage Protection System (WPS) only covered foreign workers. Starting today, it will cover domestic workers too.
If an employer violates the law, he or she could be fined up to Dh50,000
Why UAE has introduced WPS?
Over 200 nationalities reside in the UAE, which aids in the economic development and progress of the young nation.
Central Bank of the UAE and Ministry of Human Resources and Emiratisation (MoHRE) developed the pioneering policy.
As a pioneering nation, the UAE plays a leadership role in safeguarding the wages of workers and enhancing transparency and competition to improve working conditions.
All institutions registered with MoHRE in all industries are covered by the WPS.
The objectives of WPS:
- Ensure that salaries of employees are secured.
- Protect the interests of employers
- Reduce the amount of time and effort spent on paying salaries.
- A push for improved employment security in the private sector, as well as better employee-employer relations and protection of rights.
- Simple, transparent, and easy-to-use payment methods.
- Up-to-date databases for the Ministry of Labor.
- Reduces labour disputes over wages.
Exactly who is the stakeholder?
A majority of stakeholders in the process are employees, employers, banks, and agents, including other financial institutions, bureaus de change, and the UAE Central Bank, which authorizes salary payments via WPS.
What should employers do to register?
The WPS is easy to set up for private-sector employers. Using the company information provided by the Ministry, employers can create their accounts on the MoHRE official website. Logging into their accounts, employers are able to update their lists as follows: -
1. Bank account details.
2. A list of company employees with the name of the bank or agent the company works with.
3. The agent/bank where the employee has an account.
4. The date by which the salary must be paid.
Is there a penalty for violation of the WPS?
1. For the purpose of evasion or circumvention, incorrect data entered in the WPS will be penalized with a Dh5,000 penalty for each worker and a maximum penalty of Dh50,000 for multiple workers.
2. A fine of Dh1,000 per employee if they do not make payments by their due dates.
3. Making employees sign fake pay slips indicating they received their salaries - Dh5,000 per employee.