MoHRE: New Wage Protection System decision adopts gradual approach allowing establishments to rectify their status, enhance compliance

Dubai: The Ministry of Human Resources and Emiratisation (MoHRE) has reaffirmed that the Wage Protection System (WPS) remains one of the key pillars underpinning the stability of the UAE labour market, contributing to greater transparency, the protection of rights, and higher levels of compliance across the business environment. The Ministry explained that the WPS aims to ensure the timely payment of wages and strengthen confidence in the workplace, helping to minimise any potential impact on employment relationships or business continuity, while safeguarding workers' rights and supporting the sustainable growth of the national labour market. MoHRE added that the recent decision forms part of the ongoing developments to the WPS' regulatory and procedural framework, enhancing oversight and governance while supporting stable employment relationships and reinforcing the UAE labour market's competitiveness and attractiveness to global talent. The decision does not introduce any new substantive obligations for employers, but rather improves existing procedures and governance mechanisms. The Ministry noted that the decision standardises and formalises procedures related to wage payment monitoring, providing greater clarity regarding employers' obligations and enabling the swift resolution of delayed wage payment cases. It also facilitates early intervention to mitigate any potential impact on employment relationships or business continuity, serving the interests of both employers and employees while supporting the stability and sustainable growth of the labour market. MoHRE further explained that the Wage Protection System adopts a gradual and balanced approach in addressing cases of delayed wage payments. The process begins with electronic monitoring and notifications sent to employers, giving establishments sufficient time to address delays and rectify their status before administrative measures are applied within the approved timelines. This approach is designed to encourage preventive compliance and resolve violations at an early stage, reducing any potential impact on labour market stability or business continuity. The Ministry added that an establishment is considered compliant if it transfers at least 85% of the total wages due within the specified timeframe. This reflects a flexible and balanced approach that takes into account the operational realities of businesses while ensuring the protection of workers' rights. MoHRE also highlighted that certain compliance monitoring measures are implemented through a risk-based approach that takes into consideration the nature of economic activities, with particular focus on labour-intensive sectors with large-scale operations, where delayed wage payments can have a greater impact on labour relations and business continuity. This approach aims to support the stability of vital economic sectors and the sustainability of their operations, particularly those that rely on significant numbers of workers, while safeguarding the interests of both employers and employees. With the system processing more than AED37 billion in wage payments every month, the Wage Protection System remains a key pillar of labour market stability and business confidence in the UAE, highlighting the importance of its continued development to support the country's economic growth.