Ensuring Smooth Payroll with WPS Salary in the UAE

The authorities created the WPS salary UAE to provide financial protection to national and expatriate employees of the country. In this way, they allow them to receive their salary under the laws and the employment contract. The Ministry of Human Resources and Emiratization as well as the Central Bank of the UAE are responsible for monitoring the entire process.

In this article, we will show you what this system consists of and the benefits for companies and workers. Likewise, you will be able to see what documents are necessary for employees and what happens if companies do not comply with this system.

Benefits of Implementing WPS Salary

In 2009, the authorities established the WPS salary UAE or Wage Protection System with Ministerial Decree number 788. In this case, the two entities in charge of launching and applying it were the Central Bank of the UAE and the Ministry of Human Resources and Emiratization (MoHRE). However, in 2016 Ministerial Decree No. 739 strengthened the system and in 2019 the MoHRE updated the final measures of the WPS.

This system allows employers in the country to transfer salaries electronically to their employees. For this purpose, they can use authorized banks, exchange bureaus, and other authorized financial institutions. Furthermore, the WPS Salary System in UAE allows employees and employers to enjoy the following benefits:

Improved Compliance with Labor Laws

The WPS salary UAE requires compliance with the labor laws of the country about the payment of salaries. In this way, the authorities ensure that companies fulfill their legal responsibilities in the UAE. This way, it has achieved a considerable decrease in labor conflicts and sanctions against companies.

According to Labor Resolution Number 43 of 2022, employers must follow certain regulations to comply with the law. Therefore, the regulations that businesses must comply with are the following:

• New workers must be integrated within 30 days from the date of joining the company.
• The WPS salary payment date is due 1 day after the payment date established in the contract of the employees.
• After 15 days of the aforementioned due date, the authorities consider the payment to be late.
• 90% of employees must be paid in a specific month, allowing for certain unpaid leave. However, the employer must notify MOHRE if there is any leave and what its duration is.
• The employer must pay 80% of the WPS salary UAE in a specific month, allowing for some deductions. However, the employer must be willing to present evidence of said deductions at any time.
• Even if there is no specific date on which both parties have agreed on a salary payment, the employer must pay it once a month.

Penalties for non-compliance with the WPS salary statement UAE

Any company that does not comply with the UAE exchange WPS salary will be subject to established sanctions and fines. Depending on the number of days of delay and the size of the offending company, the sanctions are as detailed below:

• 17 days after the expiration date: The company that does not comply with the payment of the WPS salary during this time will not be able to receive more work permits. However, if the company in question has 50 or more employees, the MoHRE will carry out inspection visits to warn of non-compliance.
• 30 days after the expiration date: If the company has 500 or more workers, or if it is considered a high-risk establishment, they will be handed over to the Public Ministry. In the same way, federal and local authorities will take it and initiate legal actions against said company.
• 45 days after the expiration date: In this case, companies with 50 or more employees will receive the same treatment as the companies mentioned in the previous point. That is, legal actions will be carried out against said businesses.
• 60 days after the expiration date: Companies owned by the owner of the sanctioned company will also not be able to receive new work permits. Furthermore, this sanction applies to any non-compliant company regardless of the number of workers it has.

Other types of non-compliance with the WPS salary UAE

Companies that have provided incorrect data to evade payment of wages will be fined AED 5,000. This fine would be for each affected worker and a maximum of AED 50,000 if multiple workers were affected. Likewise, if the company forces a worker to sign a false receipt, it will be fined AED 5,000 for each worker.

The Ministry of Resources and Emiratization will carry out visits to the company in question to issue warnings for non-compliance with the WPS salary UAE. Also, this ministry has the power to impose administrative fines according to Cabinet Resolution No. 21 of 2020. Similarly, the company will be downgraded, that is, it will go to category C or the third level.

There is a penalty if a company takes 3 consecutive months without paying the salary of an employee. The company will no longer receive new work permits and will receive an electronic notice to schedule an inspection visit. These will take place after 6 months from the date of non-payment.

The visit in question is to determine whether an employment relationship truly exists between the business in question and the said employee. Otherwise, the authorities will take over the company to initiate legal action against it.

Real-time Monitoring and Reporting

The WPS salary UAE allows the transfer of payments to employees under the supervision of the MoHRE. This guarantees that employers make salary payments following the employment contract and at the appropriate time. Companies and authorities can obtain reliable information at any time thanks to the database that different industries must provide.

This way, both the MoHRE and the UAE Central Bank can validate and confirm the information on the spot. After they verify that everything is in order, they can proceed to authorize the transfer of the money to each employee. Thus, since registration of companies in the WPS Salary System in UAE is mandatory, there are fewer chances of labor disputes.

WPS Salary Reporting and Documentation

Companies can register for the WPS salary UAE system on the Ministry of Human Resources and Emiratization website. However, before registering, you must establish a contract with a WPS agent and have a corporate bank account. These agents may be the following:

• Traditional banks
• Authorized financial institutions
• Institutions acting as agents of banks in the UAE

The WPS agent is the one who will transfer the money in electronic format to each of the registered employees. Next, you will have to follow certain rules for WPS salary processing UAE every month. Below you can see what the procedure is for payment through the Wage Protection System (WPS).

1. Preparation of the SIF or Salary Information File: This document should include the payroll data and employee details of your business. Therefore, it should include details such as basic salary, allowances, deductions, bank account number, and job card number.

Additionally, you must prepare these files containing payroll information for the WPS.

2. The MoHRE verifies the salary: The Ministry will verify that the salary information contained in the SIF sent corresponds to the employment contracts of your business. Therefore, you must verify the salary included in the SIF to avoid errors when uploading it to the system.
3. Issue the payment order: After uploading the SIF, you can issue a wage payment order to your WPS agent.
4. Transfer of salary to your employees: Finally, the WPS agent with whom you work will transfer the salary to each of the employees included in the SIF.

Data Security and Privacy Measures

The authorities give companies a secure database to create the Salary Information File of their employees. This is because, to pay your employees you will have to send the said files to the respective bank with which you work. In addition, the MoHRE provides businesses with appropriate privacy and security measures to safeguard information.

In addition, the system is transparent in terms of safeguarding information and paying employees. Additionally, it is a very simple system to use, which allows errors to be minimized, as long as reliable information is entered.

Documenting Employee Information

In the country, there are certain rules related to who can receive the WPS salary UAE according to labor laws. Therefore, the employees eligible for this system are the following:

• All employees working in the UAE, both nationals and expatriates.
• All full-time, part-time, and temporary employees.

On the other hand, the employees that the employer is not required to include in the WPS are the following:

• Those who filed a lawsuit related to wages.
• Those who have a complaint for abandonment of work
• New employees within 30 days of the period allowed by the authorities.
• Those who are currently on unpaid leave.

Documents required by employees

Employees must provide certain documents that will allow them to enter the WPS salary system in UAE. Next, we will detail all the documentation and requirements that must be provided:

• Personal documents: In this case, they include an Emirates ID, valid passport, and residence visa.
• Bank account details: Employers can request details of the bank account of the employee, including account number and IBAN.
• Work contract: Employees must have a binding employment contract with the employer. The said contract must comply with labor law, in addition to establishing the terms and conditions of employment.

In addition, both workers and employers must ensure the fidelity of documents and accurate information. Additionally, employers must establish and keep up-to-date WPS salary UAE payment mechanisms.

Thus, this system allows workers to receive a fair salary at the right time. To do this, employers must provide a file known as a SIF with all the information on the employees of the business. If you want more information about this system, just contact us.

WPS Salary FAQs and Troubleshooting

What is WPS?

WPS Salary UAE is an electronic system that ensures that employees receive their salaries under their employment contracts and on time.

Who is the WPS system for?

The WPS system is for private sector industries and their workers located in the United Arab Emirates.

What benefits does the WPS provide to workers?

This system works as a safeguard of the financial rights of employees. Thus, it guarantees that employees will receive their salaries on time and following the employment contract.

What benefits does the employer obtain from the WPS?

The WPS system contributes to maintaining a good working relationship with employees and will avoid delays in payments. This is thanks to the fact that through this system, its workers receive their payments in efficient and transparent processes, creating an atmosphere of mutual trust.

What is WPS salary UAE processing like?

The process begins when the employer deposits the salary of its workers in a certified financial institution. Then, the payment is disbursed to the workers which will guarantee the transparency of the process and its punctuality.

What information is included in the WPS wage statement?

The information included in the WPS salary statement UAE is the data of the employees such as name, position, base salary, deductions, allowances, and the total amount.

Can employees access their payroll statements on the web?

The answer is yes since financial institutions have platforms where the employee can make inquiries.

Is there a precise format to file a salary declaration through WPS?

The Emirati government has available a certified format to declare salary by WPS that the employer and financial entities will have to use.

How often should workers receive their salary statements?

Monthly, or as agreed in the contract, workers must receive statements of their salaries.

Is it possible to request copies of previous salary statements from employees?

Indeed, workers can request statements from their employers or from the financial institution from which they receive their salaries.

What happens if an employer does not pay the WPS salary UAE or delays payments?

In this case, companies must face sanctions, such as fines or impediments to receiving new work permits.

Are there any exceptions to WPS?

The exceptions cover government employees, domestic workers, and some free zone companies. However, exceptions to this system may vary.