UAE: Firms Penalized for Failure to Pay Salaries via the Wage Protection System
In the UAE, authorities identified 33,000 instances in 2023 where companies failed to fulfill salary payments to employees via the Wage Protection System (WPS). The Ministry of Human Resources and Emiratisation (MoHRE) disclosed that it applied “administrative penalties” against these companies.
The ministry did not specify the exact nature of these administrative penalties or the amounts of fines levied against companies for non-compliance with the WPS—an electronic salary transfer system conducted through approved financial institutions. By law, all employers registered with the MoHRE are obligated to enroll in the system and disburse employee salaries through it. Consequences for breaches include suspension of work permit issuance and monetary fines. Additionally, the ministry revealed that it referred 509 companies to the Public Prosecution in 2023 for providing services without the necessary licensing. Furthermore, 55 cases of companies engaging in worker recruitment without a license were identified, and five social media accounts were shut down for unauthorized recruitment activities.
MoHRE imposed administrative penalties in over 1,200 cases involving the submission of false documents or data to the ministry to obtain services, as well as 76 cases of worker accommodations failing to adhere to stipulated standards.
In total, the ministry documented 75,000 violations during 430,000 inspection visits conducted last year. Approximately 1,077 companies were reported since mid-2022 for contravening Emiratisation decisions and policies, including instances of fraudulent Emiratisation. Moreover, 185 cases were flagged for non-compliance with the Midday Break regulation, which prohibits outdoor work under direct sunlight from noon from June 15 to September 15. In 30 other instances, companies failed to report work-related injuries, occupational diseases, or worker fatalities to the ministry. Additionally, three cases involved companies unlawfully transferring recruitment expenses to workers, among other infringements.
MoHRE received around 1,500 complaints through official community channels. The ministry conducted awareness campaigns reaching over 2 million workers and more than 9,000 employers.
In a statement, the ministry commended “the high level of compliance with labor market regulations among the majority of private-sector companies,” emphasizing employers’ awareness of the impact of these laws on fostering stable work relationships and enhancing productivity.
The Inspection Sector at MoHRE operates under specific ethical and legal standards for labor inspection, ensuring transparency and adherence to protocol, including notifying employers or their representatives of inspection dates, unless otherwise required. Inspectors are mandated to introduce themselves, uphold the law, and perform their duties responsibly, maintaining integrity, trust, and confidentiality while refraining from divulging company secrets.
