U.A.E. Wages Protection System (WPS)
The legislation to enforce salary bank transfers for blue collar work is now in force, and the more recent news items imply a mandatory, integrated T@A system.
The new system makes the electronic transfer of labourers’ wages from employer to employee mandatory following a decree issued by Labour Minister Saqr Ghobash.
Firms with 100 and above employees have until 22 November 2009 to comply with the regulation, with companies with 15 to 99 employees given another 3 months to comply. Firms with 15 or less employees have a deadline of the end of May 2010.
If your company has not already made arrangements, then it is something that we recommend you should urgently address to avoid potential problems with the Ministry of Labour.
WPS is a new initiative from the Central Bank of the UAE along with the UAE Ministry of Labour to provide a safe, secure, efficient and robust mechanism to streamline timely payment of wages to employees by employers.
WPS Connect offers banks and exchange houses an interface to connect the WPS System at Central Bank of the UAE based on WPS file formats with Automatic File Transfer.
Quotes from recent press coverage
http://gulfnews.com/business/general/new-wage-plan-to-aid-transparency-1.524276
The government has “means and ways” of ensuring companies comply with its new Wages Protection System (WPS) for workers, the UAE minister of labour said on Tuesday.
Saqr Ghobash, was addressing members of the media after the launch of the WPS in Abu Dhabi – a new scheme that involves measures to make sure the Emirates’ construction workers are paid on time, and in full.
However, he refused to say what punishments would be meted out to firms that failed to adhere to the initiative, which makes the electronic transfer of labourers’ wages from employer to employee mandatory
……the newly introduced wages protection system (WPS) will entertain only salaries paid in dirham, said banking sources.
The new system will ensure that all employees of companies with a workforce of not less than 100 receive their monthly salaries through a bank or exchange company pre-decided by the employer.
There was confusion among banks as to how salaries paid in foreign currencies could be included in the WPS scheme, which is designed to handle only payments in the UAE currency.
“Several multinational firms make payments partly in foreign currencies, especially to those who have come to the UAE on deputation, and we were waiting to hear from the Central Bankhow this can be dealt with,” said a banker.
—The new system will require all firms to pay their employees’ salaries within a stipulated time in the ensuing month, failing which will invite the authorities’ intervention. The system requires all employers to deposit the salaries in their respective banks with employee files that contain key details such as the employee’s name, identity number, the salary amount, as well as the period for which the salary is paid.
This will go to the Central Bank, which in turn will forward it to the respective agents of the employees – banks or exchange houses – where the final payment of salaries can take place.
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All firms registered with the UAE Ministry of Labour will start making payment of workers’ wages through the newly introduced wages protection system (WPS) from September, the ministry has said.
Around 4.2 million staff employed by almost 270,000 companies across the UAE will be paid under the WPS. Government related entities (GREs) and companies registered with free zones are among those exempt from the new regulation as they are not registered under the ministry.
The WPS involves the transfer of salaries through selected banks, authorised and regulated by the government.
The banks send information electronically to the government if a wage payment from an employer is received, with the payment itself sent to an agent – usually a bank – chosen by the employer, who will then pay the employee.
Firms with 100 and above employees had three months up until the end of November to comply with the regulation, with companies with 15 to 99 employees given six months to comply. Firms with 15 or less employees had a deadline of the end of May 2010.
Around 28,000 workers had already had their wages paid electronically through the system in June, the ministry said.
Firms which consistently failed to transfer payment through WPS on time would be denied the right to apply for new working permits for a period of up to three months.
The UAE’s wages protection system – a scheme that aims to make sure labourers are paid on time and in full – could be rolled out across the Arab world.
With millions of foreign construction workers employed across the region, the Arab Labour Organisation is now looking to other countries to follow the UAE’s lead.
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