Comprehensive Guide to Wage Protection System (WPS) in UAE

There are only two main incentives to work; Wages and fear of losing it! Henry Ford

Understanding the Wage Protection System (WPS)

The Wages Protection System in the UAE is a state-of-the-art electronic salary transfer system that enables institutions and organisations in the private sector to facilitate payment of salary to their employees via banks, exchange bureau and through other financial institutions approved and authorized by the UAE Central Bank as a payment system.

The wage protection system was developed by the Central Bank of the United Arab Emirates in conjunction with the Ministry of Human Resources and Emiratisation (MOHRE). The system provides MOHRE with the ability to establish a reliable database that records all salary payments in the private sector thereby ensuring timely payment of agreed-upon wages.

Compliance to Wages Protection System (WPS) is a mandatory legal requirement under Ministerial Decree No. 739 of 2016 concerning Protection of Wages, for all private organisations registered under the MoHRE, therefore, all such organisations must subscribe to Wages Protection System (WPS) and pay the wages of their employees through the WPS by delivering records of employee’s salary to their respective banks for salary distribution, thereby allowing MOHRE to ensure that all employees’ dues are paid correctly.

The WPS covers all institutions registered with MOHRE across various businesses in multiple sectors and industries to benefits different categories of labours. However, government organisations and public sector institutions are exempted from WPS compliance.

Major Advantages of Wage Protection System;

  • Ensure timely payment of agreed-upon wages to employees.
  • Making a seamless salary process system that helps employers to protect their interests and reduce the time and effort required to pay due wages and salaries.
  • Improves job security, strengthens work relationships and protects the rights of employers and employees in the private sector.
  • Ensure transparency and competitiveness in work relationships.
  • It provides protective and proactive measures to employees and avoids labour or industrial disputes regarding the payment of wages.
  • Ensures that the UAE Ministry of Labour is updated on new wages data in the private sector which helps effective administration of the labour market.

Registration Process for WPS in the UAE

In the UAE, private-sector employers can simply register for the Wages Protection System. The entire system is accessible through MoHRE’s official website, where employers may create an account using their company’s details as provided by the Ministry. Employers may then log in to their account and update the lists with the following information;

  • Bank account details.
  • A list of workers, together with information about the bank or agency with whom the company works.
  • The bank or agency with which an employee has a bank account.
  • The specific date on which the salary must be paid.

Payment Process of WPS;

The employer is required to perform the following procedure to transfer the salary of the employees;

  • Open a bank account with an approved bank (or agent in case it does not hold a bank account in the UAE).
  • Enter into a WPS Agreement with the bank or agent.
  • Provide salary transfer instructions to the bank or agent.
  • The bank or an agency notifies the UAE Wages Protection System, which sends employee information, wages, and salary transfer instructions to the UAE Central Bank via an electronic system to the UAE Central Bank.
  • The UAE Central Bank then forwards all of the required information to MOHRE for verification.
  • WPS provides authorisation to the employer’s bank or agent permitting it to pay the salary of the employees.
  • Finally, the salary is transferred to the employee’s bank account by the bank.

Fines for evading WPS

In accordance with Ministerial Resolution No. (15) of 2017, the following sanctions shall apply for activities involving fraudulent use of the WPS;

  • Entry of incorrect data in the WPS with intent to avoid or circumvent shall be punishable with a fine of AED 5,000 for each worker and a maximum of AED 50,000 in case of multiple workers.
  • Failure to pay on due dates through the WPS shall be a punishable fine of AED 1,000 per employee
  • Forcing employees to sign on fraudulent payslips claiming that they have received their salaries shall be punishable with a fine of AED 5,000 per employee.

Laws regarding Payment of Salary in UAE;

  • Workers in the UAE who are employed on a monthly or annual basis must receive their salary once a month on due dates and no later than 10 days after the end of each compensation period.
  • In case the contract does not specify such times, the employer must pay the employee once every 14 days.
  • Payments must be made in the UAE’s national currency and on working days.


Penalties on companies failing to pay Salaries;

 A. Penalty on companies employing over 100 workers;

In case the company employs more than 100 workers and fails to remit their wages within a period not exceeding 10 days, the consequences will be as follows;

  • The Company will not be issued work permits starting from the 16th day from the date of delay in wages.
  • Companies delaying wages a month from the due date will be referred to judicial authorities for punitive measures.
  • Action would be taken against all companies owned by the same owner.
  • The owner(s) will not be able to register any new company.
  • Employees’ bank guarantees will be liquidated.
  • The company will be downgraded to the third category.
  • Workers will be permitted to find other job opportunities

Additionally, if a company delays salaries for more than 60 days, the company will be fined AED 5,000 per worker (whose wages are delayed), with a maximum fine of AED 50,000 in case multiple workers’ wages are delayed.

B. Penalty on companies employing less than 100 workers

If a company employing less than 100 workers fails to pay the salary within 60 days from the due date, penalties will include:

  • Barred from issuing work permits.
  • Liability to pay monetary fines issued by MOHRE
  • referral to Court proceeding.

In case the company commits such violations more than once a year, penalties stated for companies that employ over 100 workers shall be applied by MOHRE.



https://u.ae/en/information-and-services/jobs/payment-of-wages https://www.bayut.com/mybayut/wps-uae-guide/

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