HR Update: Penalties for late salary payments — are companies prepared?
The Ministry of Human Resources and Emiratisation (MOHRE) issued a decree that introduces new penalties against employers who fail to pay wages on time.
Who does this apply to?
This applies to all companies that are registered with the Ministry
When does it apply?
Employers will be given a reminder on the late payment of their wages. Reminders will be sent on the 3rd and the 10th day after the payment due date of wages before penalties are imposed.
What penalties could be imposed?
Penalties for late payment of wages can include:
- Suspension of new work permits
- A notice to the public prosecution
Companies who have 50 or more employees may become subject to field inspections from the Ministry should wages not be paid 17 days after due date.
Smaller organisations face the prospect of work permits being suspended.
In all cases, further and continued delays in the timely payment of wages will result in an escalation of penalties.
All companies registered with the Ministry have a three-month grace period to align to the new decree before penalties will apply.
What is WPS and how does it help?
The WPS (Wage Protection System), an electronic salary transfer system has been in place since 2009, the purpose of which is to ensure compliance of payment for workers wages. All companies registered with the Ministry are obligated to register for WPS which will enable the Ministry to oversee private sector wage payments.
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