UAE’s WPS helps safeguard workers’ rights

Regulated system and happy workers are vital for construction industry

Promoth Manghat is vice president of Global Operations for UAE Exchange.
Promoth Manghat is vice president of Global Operations for UAE Exchange.

Until half a decade ago, there was no foolproof mechanism available to track salary disbursals in the UAE.

This led to the advent of the Wages Protection System (WPS), by the Ministry of Labour and monitored by the Central Bank of UAE.

In the pre-WPS era, several companies that did not pay or that delayed salary payments to their employees went largely unnoticed, causing a dent in the reputation of the country in terms of the protection of labour rights.

During the real estate boom, the mushrooming of construction companies triggered a constant flow of migrant labour.

Safeguarding labour rights thus became a critical challenge for the UAE Government, along with ensuring that employers pay staff on time so that their financial welfare was guaranteed and that employees do not fall victims to errant companies.

Looking back, the WPS system introduced by the Ministry of Labour has been a huge success – it has brought in peace of mind to thousands of migrant workers as their salaries are being paid on time.

The WPS has built a compliance platform wherein on-time salary disbursals have become mandatory and no violation on this front is tolerated.

Today, the labour market in the real estate and construction segment is well-regulated and acts as a model for other organisations that set up shop in the country.

Concurrent to the government decision to introduce WPS, exchange houses stepped in and cooperated with WPS to address the challenge of salary disbursal to thousands of workers.

These remittance companies collectively form an important cog in the wheel of the WPS machinery, managing salary disbursals to a large pool of the migrant labour force, estimated at $7.8mn by the United Nations in 2013.

For instance, UAE Exchange introduced Smart Pay, a leading salary disbursal suite, which now distributes salaries to more than 400,000 workers from over 20,000 companies, of which over 1,000 are from the construction segment having an employee base of some 250,000.

Through Smart Pay, UAE Exchange dispenses more than $136mn in salaries to these workers every month, and 60% of this goes to those operating in the construction sector. It has also sought to do this in a convenient manner by opening branches near labour camps.

Under the Smart Pay scheme, UAE Exchange issues a MasterCard-enabled payroll card which can be used in any ATM as well as in merchant establishments through POS across the world (including UAE).

It can also be used through certain Cash Dispensing Machines (CDM) set by UAE Exchange.

UAE Exchange has also built in additional value adds to the process of salary disbursals – for instance the `Smart Pay Care’ programme, which offers financial aid to workers who suffer critical illnesses or disabilities in the workplace.

The WPS system is continuing to grow in popularity as more companies sign up to schemes.

The convenience of WPS schemes can be demonstratec by the fact that last year salary disbursals through such methods increased by 20%.

These products are playing a major role in fulfilling the vision of the Ministry of Labour and the Central Bank of UAE in protecting labour rights.

A regulated system and happy workers are the bricks and mortar of a healthy construction industry.

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