All group firms blacklisted if one defaults on WPS

The Ministry of Labour (MoL) is getting tougher with companies which have defaulted on implementing the Wage Protection System (WPS) in the stipulated time.
 
The ministry has already black listed many companies that failed to channelise the workers’ salary through the banking system since the new regulation came into effect from the middle of this year.
 
According to the new guideline, group companies owned by the same local sponsor of the defaulting firm will also be blacklisted and prevented from conducting routine transactions. If a sponsor has ten companies and if even one company defaults on WPS implementation, all the ten companies will be black listed, as against the earlier practice of blacklisting just the defaulting firms.
 
Officials in the UAE Labour Ministry confirmed to Emirates 24|7 that now the blaclisting will affect other companies owned by the same sponsor. “If the local sponsor of a company that has not implemented or defaulted on Wage Protection System, the ban will be extended all other companies owned by the same owner,” said the official.
 
There are nearly 10,000 companies in the UAE with more than 50 employees and majority of them have registered for the WPS system. The MoL deadline for implementing WPS system came at the height of economic downturn due to which some companies could not fully comply with the requirement.
 
Companies that failed to transfer workers' wages before the deadlines specified by the ministry have been denied the right to have new work permits. This ban is lifted in the month following the transfer of workers' wages in full. All those responsible for the violation can be referred to the court. The move to curb labour permits and to blacklist other companies owned by the same sponsor is the latest punitive measure introduced to make them implement the WPS system.
 
WPS is an electronic salary transfer system that allows institutions to pay workers’ wages via banks, exchange houses, and financial institutions approved and authorised to provide the service. The system, developed by the Central Bank of the UAE, allows the Ministry of Labour to create a database that records wage payments in the private sector to guarantee the timely and full payment of agreed-upon wages. The WPS covers all institutions registered with the ministry across all sectors and industries and will benefit different categories of labour.

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