UAE launches Wage Protection System
MoL takes big step in promise to safeguard labourers' salaries
The UAE government took a big step on Tuesday towards fulfilling its promise to safeguard the timely and accurate payment of labourer’s salaries by launching the Wages Protection System (WPS).
The system, initiated by the Ministry of Labour (MoL) in conjunction with the UAE Central Bank was unveiled by UAE minister of labour Saqr Ghobash and Central Bank governor Nasser Al Suwaidi at the Abu Dhabi National Theatre.
All firms across the country will have to comply with the system by law, regardless of size or sector.
No indication was given regarding the time frame for implementation, though it was revealed that a ministerial order regarding this will be issued in due course.
“UAE businesses will now adhere to timely wage payment at the exact amounts agreed with employees,” Ghobash said.
“The system reflects the government’s willingness to safeguard the basic rights of all concerned parties.”
A penalty system will also be introduced to punish firms that fail to comply with the WPS, though the nature of the penalties is yet to be decided upon.
Ghobash would only reveal that non-abiding businesses “will be subject to disciplinary action.”
The MoL indicated last month at its seminar on Labour and Human Rights in Dubai that its plans for the WPS were at an advanced stage.
“WPS will provide a series of innovative solutions including notifications to businesses which fail to comply and delay paying wages,” Al Suwaidi said. “It is based on flexible technology that allows for future system upgrades.”
How-to: the wages protection system
1 - A number of banks, exchange companies and service providers will be licensed by the UAE Central Bank. This will be a prerequisite to their participation in the system.
2 - The employee may choose any one of these agents, or a number of these agents, as his or her service provider.
3 - Once the employer’s bank or company receives worker’s wages, data will be sent to the WPS, which will then forward payment instructions to the selected agent. The same information will be received by the MoL.
4 - The WPS will notify the MoL concerning which businesses fail to pay wages on time.
The MoL added that ample time will be provided for businesses to prepare themselves for participation in the system.