UAE: Up to Dh50,000 fine for not paying salaries on time; penalties for delays explained

Labour welfare is among the top priorities for the UAE government. The country’s leadership has issued several decrees to protect workers' rights that cover recruitment, pay, housing and health.

The Ministry of Human Resources and Emiratisation (MoHRE) recently reminded private sector establishments to commit to paying the salaries of workers on time.

This needs to be done via the Wage Protection System (WPS), it said.

The WPS, which was implemented in 2009, is an electronic mechanism that ensures timely payment of workers' wages.

Under this system, salaries of employees will be transferred to their accounts in banks or financial institutions that are authorised by the Central Bank of the UAE.

Fines and penalties

According to the official UAE Government website, companies can be penalised for not paying salaries on time. Salary is considered ‘late’ if the wage is not paid within 10 days from the due date.

>> WPS fraud

- Entry of incorrect data in the WPS for evasion or circumvention: Dh5,000 per worker, with a maximum of Dh50,000.

- Failure to pay on due dates through the WPS: Dh1,000 per employee.

- Forcing employees to sign fake pay slips showing that they received their salaries: Dh5,000 per employee.

>> Delay in paying salaries (companies employing over 100 workers)

- If wages are delayed by over 60 days, a fine of Dh5,000 per worker will be levied, with a maximum fine of Dh50,000.

- They will not be issued work permits starting from the 16th day from the date of delay.

- Companies delaying wages by a month 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.

- Referral to court.