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Wages Protection System, and what UAE law says about salary delays

A guide to the UAE's Wages Protection System, and other FAQs about the UAE Labour Law, based on official government data

WPS is a robust worker system in the UAE.
Time Out Dubai
WPS is a robust worker system in the UAE.

An initiative was launched by the UAE’s Ministry of Human Resources and Emiratisation (Mohre) and National Bonds Corporation that encourages labourers to make savings through the Wages Protection System (WPS), but what is the WPS; how does it protect employees against late payments; and what are the labour law mechanisms that staff can pursue if their employer delays their salaries?

In this article, Construction Week rounds up the answers to these FAQs and many more, all of which can help construction staff in the UAE – be it newly arrived expatriates or seasoned professionals that call the Emirates their home – better understand the UAE’s robust, strong, and fair labour law guidelines. All data provided in this article has been collected from the UAE Government’s official portal.

What is the WPS in the UAE?

As explained by Mohre’s Wages Protection System User Manual PDF, WPS is an electronic salary transfer system that allows companies to pay workers their wages through banks, bureaux de change, and financial institutions that are approved and authorized to provide the service.

The WPS covers all institutions registered with the ministry across all sectors and industries, and will benefit different categories of labour.

Among WPS’s many benefits are that it reiterates the UAE’s commitment to protect workers’ wages; provides an innovative solution that helps employers safeguard their interests and reduce the time and effort taken to pay wages; and improves job security and strengthens working relationships.

Additionally, the WPS also entrenches transparency; ensures that Mohre is regularly and constantly updated on wages data in the private sector in order to guarantee that employers fulfil their salary obligations; and serves as a protective and proactive measure to reduce labour disputes pertaining to wages.

Is the WPS mandatory in the UAE?

According to Ministerial Decree No. 739 of 2016 Concerning the Protection of Wages, all employers registered with Mohre must subscribe to WPS, and pay their employees through the system on due dates.

As the UAE Government’s official website explains through data last updated on 3 March, 2019, WPS allows for salaries to be transferred into workers’ accounts – be it in banks or financial institutions – that are authorised by Central Bank of the UAE.

“Mohre will not process any transactions or deal with the owners of the companies that are not registered with the WPS until they register in the system,” the government portal adds.

According to a document available on Mohre’s website, WPS was developed by the UAE Central Bank and allows the labour ministry to “create a database that records wage payments in the private sector to guarantee the timely and full payment of agreed-upon wages”.

It adds: “The WPS covers all institutions registered with the ministry across all sectors and industries and will benefit different categories of labour.”

What can I do if my employer doesn’t pay me on time, and can I sue them?

Failing to abide by the requirements of Mohre’s WPS can have serious repercussions for companies in the UAE. As the official UAE Government portal explains, according to Ministerial Resolution No. 15 of 2017, fines for evading WPS or its fraudulent use cover the following scenarios, and include penalties as follows:

  • Entry of incorrect data in the WPS for the purposes of evasion or circumvention - AED 5,000 for each worker and a maximum limit of AED 50,000 in case of multiple workers
  • Failure to pay on due dates through the WPS – AED1,000 per employee
  • Forcing employees to sign fake pay slips showing that they received their salaries – AED 5,000 per employee

Similarly, late or unpaid salaries are also penalised under the stipulations that guide WPS. An employer is considered as being ‘late’ to pay wages if the salary is paid within 10 days from the due date – which makes it the next day of the end of the salary period – or if the salary is not paid within one month of the due date.

Serious penalties apply on companies that are failing to pay salaries. Fines for companies that employ more than 100 workers, and have not paid dues within a 10-day period, are as follows:

  • They will not be issued work permits starting from the 16th day from the date of delay
  • Such 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 allowed to move to other companies

The UAE Government’s portal says the law states that if a company with more than 100 workers delays salaries for more than 60 days, it will face a fine of AED 5,000 per worker whose wage is delayed, with a maximum fine of AED 50,000 in case multiple employees have not been paid.

Similarly companies employing less than 100 workers that do not pay dues within 60 days of the due date face the following penalties:

  • work permits ban
  • fines
  • referral to court

“If the company commits such violations more than once in one year, Mohre will apply penalties stated for companies that employ over 100 workers,” the portal adds.

What is the minimum basic salary in the UAE?

According to the UAE Government’s official portal, while “there is no minimum salary” stipulated by the UAE’s Labour Law, the document “broadly mentions that salaries must cover basic needs of the employees.”

The official government website continues: “Article 63 of the Labour law mentions that the minimum wage and cost of living index is determined either in general or for a particular area or a particular profession by virtue of a decree and consent of the Cabinet.”

Do you still get paid if you quit without notice in the UAE?

As the UAE Government’s official portal explains in an update dated 20 March, 2019, an employee can terminate an employment contract without notice period if one of the following situations has occurred:

  • The employer has failed to meet contractual or legal obligations towards the worker (for example, if he fails to pay wages for a period exceeding 60 days);
  • The employee has filed a court complaint against an employer who has failed to secure employment of the worker (for example, in case of a business shutdown or if the business has been inactive for a period exceeding two months), and;
  • The final ruling for a labour complaint referred to the labour court by Mohre is in favour of the worker.

A separate note by the UAE Government’s official portal – answering FAQs about Labour Bans and updated on 12 March, 2019 – explains that among other reasons, a labour ban may be imposed if an employee “illegally terminated the employment contract or did not observe the provisions of the UAE Labour Law”, adding: “For example, not respecting the notice period mentioned in his non-limited contract or terminating his limited contract before the end of its duration.”

How is gratuity calculated in Dubai?

As the UAE Labour Law is a federal-level document, gratuity calculations in Dubai are not different from those in its sister emirates. The end of service gratuity is calculated on basis of last wage which the employee was entitled to, namely the basic salary. Hence, it will not include allowances such as housing, conveyance, utilities, furniture, and so on, the UAE Government’s website explains in an update dated 3 March, 2019. 

Additionally, if the employee owes any money to the employer, the employer may deduct the amount from the employee's gratuity.

The UAE Government’s official portal states that in a limited contract, an employee that has spent one year or more in continuous service shall be entitled to an end of service gratuity upon the termination of their service.

It adds: “The days of absence from work without pay shall not be included in the calculation of the period of service and the gratuity shall be calculated as follows:

  • If an employee has served for less than 1 year, he is not entitled to any gratuity pay.
  • If an employee has served for more than 1 year but less than 5 years, he is entitled to full gratuity pay based on 21 days' salary for each year of work.
  • If an employee has served more than 5 years, he is entitled to full gratuity of 30 days' salary for each year of work following the first five years.

In all cases, the total gratuity shall not exceed the wage of two years.”

The situation is slightly different for unlimited contracts, as the portal continues. Here, if an employer has terminated the contract, then the calculation will be as follows:

  • If an employee has served for less than 1 year, he is not entitled to any gratuity pay.
  • If an employee has served more than 1 year but less than 5 years, he is entitled to 21 calendar days' basic salary for each year of the first five years of work.
  • If an employee has served more than 5 years, he is entitled to 30 calendar days' basic salary for each additional year, provided the entire compensation does not exceed two years' pay.

On the other hand, if an employee resigns from an unlimited contract, their gratuity will be calculated as follows:

  • If an employee resigns before completing 1 year of service, he is not entitled to any gratuity pay.
  • If an employee has served between 1 and 3 years, he is entitled to one third (1/3) of 21 days' basic salary as gratuity pay.
  • If an employee has served between 3 and 5 years, he is entitled to two-thirds (2/3) of 21 days' basic salary as gratuity pay.
  • If an employee has served more than 5 years, he is entitled to full 21 days' basic salary as gratuity pay.


Construction Week is not responsible for any amendments made to the UAE Labour Law. All labour disputes must go through Mohre. This article may only be used as a guide.

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