What is the UAE’s WPS (Wage Protection System)?

What is Wage Protection System?

Using their WPS code, banks, exchange houses, and other financial institutions can serve as registered agents for the Wages Protection System (WPS), which is an electronic salary transfer mechanism.

The Wages Protection System receives an electronic notification from a registered agent as soon as it receives a worker’s salary transfer instructions and immediately delivers the worker’s salary file to the agent for payment. Each employee receives an electronic card that they can use to withdraw their pay from the cash dispenser owned by the agent.

WPS targets the following parties from the Ministry partners:

• Workers: everyone with a labor card issued by the Ministry who performs work in the private sector in exchange for agreed-upon wages.
• Employers: anyone who runs a business or organization registered with the Ministry and hires one or more employees in exchange for a pay that has been mutually agreed upon.
• Agents: The financial institution with whom the employer has a bank account and with whom the salaries amount is transferred via WPS to the designated agent for distribution to the employees. Any bank, bureau de change, or other financial institution that the Central Bank of the UAE has licensed and given permission to provide WPS services for wage payment. A list of the names of approved and authorized agents will be published by the Central Bank of the United Arab Emirates on a regular basis.

Joining WPS Requirements:

The business must be authorized by the Ministry. The business must have a bank account with one of the UAE-based banks. Any bank, bureau de change, or other financial institution that the Central Bank of the UAE has approved and permitted to perform the service should be contracted by the company.

Any service costs and fees must be agreed upon by the parties. By the timeframes outlined in the Ministerial Resolution No. 788 of 2009, earnings will be sent via WPS.

Within two weeks of the due date, or on the dates stated in the employment contract if wages are paid more frequently than monthly, the institution must transmit worker wages via WPS.

All expenditures incurred upon joining WPS, including bank fees, service provider fees, and all other costs, shall be the employer’s responsibility. Employers are not permitted to share any costs with employees in any way, including by directly or indirectly withholding from their pay.

The WPS applying mechanism is as below:

• The company must enter into a contract with a WPS agent, whether it be a bank, bureau de change, or other financial institution, that is approved and authorized by the Central Bank of the UAE to provide this service.
• The employer must give instructions to its bank to transfer wages to employees if it does not already have an account with one of the banks operating in the nation. A thorough wage list that includes a copy for the agent must be sent with the instructions.
• The Central Bank of the UAE will then forward those details to the Ministry of Labour database to ensure that the details received correspond with those registered with the Ministry. The WPS will send the approved information to the designated agent in order to begin paying the wages.
• The WPS will electronically send the Central Bank of the UAE the workers’ details, wages, and salary transfer instructions.

Consequences of rejection to join WPS:

Institutions will not be eligible for new work permits if they don’t transmit employees’ earnings by the deadlines listed above. Only the month after the complete transfer of the workers’ wages will this restriction be eliminated.

According to Ministerial Resolution No. 788 of 2009, organizations that fail to pay wages within a month of the due date will be prohibited from obtaining new work permits, along with any organizations that are owned by the offending organization. They will also be required to report any of the offenders to the court.

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