Labour welfare, particularly protecting the vast migrant labour workforce, is among the top priorities for the UAE government, with the country’s leadership having several decrees in place to protect workers' rights.

The International Labour Organisation estimated that in 2017 the Arab States hosted 23 million migrant workers, with remittances from the GCC to migrant workers being $120 billion in 2019 according to the UN*.

Companies in the United Arab Emirates face fines up to 50,000 dirhams for not paying their employees on time and also risk losing work permits under the Wages Protection Scheme.

The Wages Protection System (WPS) is an electronic salary transfer system that allows institutions to pay wages via banks, bureaux de change, and financial institutions approved and authorised to provide the service.

It is a mandatory legal requirement in the UAE registered under The Ministry of Human Resources and Emiratisation (MoHRE). The company must enter into a contract with any of the banks or financial institutions approved by the Central Bank of the UAE to issue services.

Salary is considered ‘late’ if the wage is not paid within 10 days from the due date. 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. Companies delaying wages by a month will be referred to judicial authorities for punitive measures.

Co-Founder of NOW Money, Katharine Budd, comments: “The WPS came into force in 2009 and was further strengthened by another Ministerial Decree in 2019 but it is still not as well known as it should be. The WPS is essential particularly for those on low incomes to ensure these workers’ rights are protected. The WPS and the recent news of the federal levy on corporate earnings for the first time ever next year, demonstrates how the UAE is seeking to align itself with international standards.

She continues: “This makes it even more important for businesses’ payroll, accountancy and electronic banking systems to be robust, transparent and effective to ensure protection of employees and employers. Traditional banking methods are not always enough to protect companies from large fines and to keep up with the pace of the Gulf’s position as a world leader in business activity and employee protection during an exciting growth period for the UAE.”

For more information on WPS, visit nowmoney.me/what-is-wps-in-uae/

-Ends-

Sources

*https://www.ilo.org/beirut/areasofwork/labour-migration/lang--en/index.htm

*https://www.brookings.edu/blog/future-development/2020/09/17/pandemic-highlights-the-vulnerability-of-migrant-workers-in-the-middle-east/

About NOW Money

NOW Money works with GCC companies as a payroll service. Every company receives the easy-to-use NOW Money payroll portal, and every employee receives a NOW Money account, and the NOW Money app, which gives them the ability to remit money overseas safely and quickly at low cost.

NOW Money has won over 20 awards internationally for financial inclusion and is backed by the world’s best-known fintech venture capital funds, banks and regulators.

NOW Money is the working name of NOW Payment Services Provider L.L.C, license number 767072 since 2016.

To find out more about NOW Money, visit https://nowmoney.me/or follow on Twitter and LinkedIn.