WPS in the Emirates: Wages Protection System
The United Arab Emirates are home to over 200 nationalities, all of whom have come to try their luck in the peninsula. All these expatriates actively participate in the local economy. It is for this reason that the Ministry of Human Resources and Emiratisation (MOHRE) has decided to intervene by facilitating the payment and distribution of salaries to private companies in the Mainland via a new system called “The WPS”.
What is WPS?
The WPS was introduced in 2019 and it’s an electronic salary transfer system that ensures timely payment of salaries in Dubai. It allows companies in the UAE to pay their employees’ salaries every month through a bank, licensed financial institutions or foreign exchange offices.
It should be noted that only private sector companies registered in the Mainland are concerned and must have an account with one of the institutions mentioned above.
This system was developed by the Central Bank of the United Arab Emirates and allows the Ministry of Labour to verify the complete payment of salaries in a time.
Salary transfers can therefore be made through banks, bureaux de change and financial institutions that are licensed and authorized to provide this type of service.
All private companies registered with the Ministry must join the WPS and all those who do not will be denied any new work permits until wages are fully paid.
How to join the WPS network
The first requirement is to be a company registered in the mainland with DED. The company that is registered in the mainland must have a bank account with a local bank operating in the UAE. It is up to the company to approach a bank, bureau de change or a financial institution accredited by the Central Bank to provide this service (your choice). The two entities sign a contract and define the service fees and charges. Workers’ salaries will be transferred via WPS according to the deadlines specified in Ministerial Resolution No. 788 of 2009.
How does WPS work in practice?
MOHRE has provided a secure database for private sector employers to create salary files for their staff.
The process is very simple, in preparation for the distribution of salaries to their employees, companies will need to send digital files to their respective banks. Each of these digital files contains confidential information about the employee’s salary and allows MOHRE to ensure that the employees’ salaries have been paid on time.
How can I get my salary back from the WPS system?
There are two ways to withdraw your salary from the WPS system:
- Withdrawal via a WPS card by the employee.
- Withdrawal via the employee’s personal bank account.
Withdrawal by WPS card
If the employee does not have a personal bank account in the UAE to receive their salary, there is the option of the WPS card. It is very easy for companies registered in the WPS system to partner with money exchange offices in the UAE. This allows them to offer their employees without a bank account a WPS compliant payroll solution. This WPS card can be used throughout the emirates at different locations.
Through a bank counter
For employees who have an active bank account in the UAE, it is as simple as presenting your bank card at an ATM to withdraw your salary; the process is quick and easy. As an employee, you will receive a notification by message to notify you that your salary has been paid into your bank account.
Fines and penalties
The UAE government strongly sanctions all companies that fail to pay wages on time. A salary is considered ‘late’ if it is not paid within 10 days of the due date.
For example, your salary is usually paid on the last day of each month. Your employer is obliged to pay you your salary within 10 days, i.e. before the 10th of the month. If you fail to do so, your employer is liable to penalties and sanctions.
See our article: “AED50,000 if you don’t pay wages on time”
Don’t even think about WPS fraud
When we talk about WPS fraud we are talking about:
- Entering incorrect data into the WPS system for evasion or circumvention purposes: a fine ranging from AED 5,000 per worker to AED 50,000 if several employees complain.
- Failure to pay on the due date through the WPS: AED 1,000 per employee.
- Forcing employees to sign false pay slips showing that they have received their wages: AED 5,000 per employee.
The payment of salaries is taken very seriously in the UAE, with the government striving to put in place new procedures to ensure that employees are not short-changed. Timely payment of salaries is the assurance of stable labour relations.
Our team is multi-disciplinary and can assist you with the WPS registration process and the payroll management of your employees. For more information please contact us : support@merritt.group
