The United Arab Emirates (UAE) is standardising the deadline for paying private-sector salaries to regulate wage payments across the country, Khaleej Times reported on Monday.
According to a new rule introduced under the UAE’s Wage Protection System (WPS), salaries must be paid on the first day of each month for the previous month, while payments made after the first will be considered delayed. The rule is scheduled to come into effect on June 1.
According to Khaleej Times, the decision was issued on May 12 following a ministerial resolution issued earlier in the month by the UAE’s minister of human resources and emiratisation. The resolution aims to strengthen compliance and ensure timely wage payments across private sector establishments.
Under the new regulation, all companies registered with the ministry are required to distribute wages through the approved system or other authorised payment channels. Employers must also provide documents and data confirming salary payments.
The UAE also outlined clear thresholds for what constitutes compliance under the WPS and consequences for delays in a ministerial resolution.
According to Khaleej Times, a private company will be considered compliant if it pays “at least 85 per cent of the total wages due to its employees” by the set deadline.
“This threshold takes into account cases where part of the salary may be legally deducted or withheld,” Khaleej said, adding that a worker will still be considered to have received their salary if they are paid at least 85pc of their total entitled wage — as long as the remaining amount is due to legally permitted deductions or withholdings.
For companies that fail to pay wages on time, authorities will enforce penalties and measures in line with existing laws and procedures, with oversight from judicial and regulatory bodies, it added.
The decision set out a series of escalating measures, saying that authorities would begin sending notifications and alerts to non-compliant establishments from the second day of non-payment.
From the fifth day after the deadline, the company will not be granted new work permits. The employer will be notified of the suspension, along with the reasons behind it, and will receive a second warning.
“If an employer fails to pay wages by the 11th day after the due date, the company will face administrative fines as specified in Cabinet Resolution No. 21 of 2020. The company will be reclassified to the third category, and repeat violations within a six-month period will result in further action,” Khaleej said.
From the 16th day after the deadline, authorities will automatically register an individual or collective labour dispute on behalf of the affected workers. The company’s issuance of new work permits will also be suspended.
These measures apply to employers with 25 or more unpaid workers, as well as businesses owned by the same employer when the total number of affected workers reaches 25.
From the 21st day after the deadline, authorities will issue an executive order to ensure wages are paid, or initiate collective labour dispute registration procedures for workers numbering 50 or more. Precautionary seizure procedures can also be initiated against the company, and a travel ban may be imposed on the person responsible for the establishment.
“In cases of repeated violations over two consecutive months, firms with more than 50 employees can be referred to the Public Prosecution, with authorities sharing all relevant documents and data for legal action,” Khaleej added.
Authorities may also intervene regardless of the size of the establishment if there are risks to the UAE labour market stability.
The rule exempts certain cases and types of workers, including those absconding, those unable to work for legal reasons, those on approved unpaid leave, and those that fall into certain categories outside the scope of the WPS, such as foreign employees of overseas firms paid outside the UAE. Certain sectors, such as banks and places of worship, are also excluded.
“The updated rule is expected to enhance transparency in wage payments and reinforce protections for workers by establishing a clear, unified salary deadline for all private sector employers in the UAE,” Khaleej said.
