The Wage Protection System or commonly known as (WPS), became a reality in July 2009 with Ministerial Decree No. 788. The WPS system is a system introduced by both the UAE Ministry of Labor and the Central Bank of UAE as per Ministerial resolution 788 of 2009, as a labour protection law. This means that instead of receiving wages in cash, workers get paid directly into their bank accounts. With WPS, the Department of Labor can track whether salaries are being paid on time and impose penalties on employers if necessary. The United Arab Emirates was the first GCC country to formally enact the WPS regime.
Workers’ wages must be transferred through the Wage Protection Scheme within the time limits set by law, according to Ministerial Decree No. 788 of 2009. To use WPS, a company must be registered with the Department of Labor. This enables employees to receive transparent wage payments. In any case, if the company fails to pay the employee, the work permit will be revoked and denied until the previous fee is paid.
All employers registered with the Ministry of Human Resources and Emiratization must subscribe to the ‘Wages Protection System (WPS)’ and pay wages to their employees through it, as per the due dates.
The WPS in the UAE ensures that wages are paid on time as agreed between the employer and the employee. In addition to its many functions, it performs the following:
- All employee payments must be made through the UAE Central Bank.
- All employees’ pay must be deposited directly into their bank accounts.
- Every employee must always have access to their funds.
- Ensure a straightforward and transparent wage distribution system.
- Assure job security in the UAE’s private sector.
- Promised to protect employee wages.
For several years, the GCC countries have used the Wages Protection System (“WPS”), which has proven to be a useful tool for simplifying, regulating, and ensuring timely payment of employee salaries, as well as a reliable means of monitoring employer non-compliance.
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HR Chronicle is the Leading HR and Payroll Management software in the UAE Region. HR Chronicle is fully compliant with GCC country rules out of the box.