Company formation specialist

Wages Protection System (WPS) is an electronic salary transfer system that allows institutions to pay worker’s wages via banks, bureaux de change, and financial institutions approved and authorized to provide the service.

The system, developed by the Central Bank of the UAE, allows the Ministry of Labour to create a database that records wage payments in the private sector to guarantee the timely and full payment of agreed-upon wages.

The WPS covers all institutions registered with the Ministry across all sectors and industries and will benefit different categories of labour.
The WPS reflects the UAE’s leading position in the region, and will increasingly project the country as a model worth emulating in the following areas:
   •  Reiterating commitment to protect workers’ wages;
   •  Providing innovative solutions that help employers safeguard their own interests and reduce the time and
      effort needed to pay workers’ wages;
   •  Taking serious steps to improve job security in order to strengthen work relationships in the UAE and
       safeguard the rights of all parties concerned;
   •  Entrenching transparency and competitiveness;
   •  Ensuring that the UAE Ministry of Labour is regularly and constantly updated on wages data in the private
      sector in order to guarantee that employers fulfill their salary obligations;
   •  Taking protective and proactive measures to reduce labour disputes pertaining to wages.

WPS Targets:

   •   Workers: each and every individual who works in the private sector in return for agreed-upon wages and 
       who has a labour card issued by the Ministry;
   •  Employers: whoever owns a company or institution registered with the Ministry and hires one or more  
      workers in return for agreed-upon wages;
   •  Banks: the financial institution which the employer has a bank account with, that is used to transfer the
       wages amount through WPS to the appointed agent to distribute to the labours.
   •   Agent: any bank, bureau de change, or financial institution approved and authorized by the Central
       Bank of the UAE to offer wages payment services via WPS. The Central Bank of the UAE will issue a regularly
       updated list showing names of approved and authorized agents.

WPS Requirements :

1.  The company needs to be registered with the Ministry;
2.  The company should have a bank account with one of the banks operating in the UAE;
3.   The company should enter into contract with any bank, bureau de change or financial institution
      approved and authorized by the Central Bank of the UAE to provide the service. The two parties shall agree
      on any service fees and charges.
4.   Workers’ wages will be transferred via WPS by the deadlines specified in the Ministerial Resolution
      No. 788 of 2009.
Deadlines for institutions to start transferring workers’ wages via WPS
   5.  The institution will have to transfer workers’ wages via WPS within two weeks of their due date, or on the
       dates specified in the work contract if wages are paid more frequently than monthly.
   6.  The employer will be responsible for all expenses incurred upon joining WPS, including bank fees,
        service provider charges, and all other costs. Employers are not allowed to share any costs with
       workers’ by any means, including deducting from their wages, directly or indirectly.

The WPS Mechanism

   •  The company shall open an account with one of the banks operating in the country, in case it doesn’t have
      one upon joining the WPS system;
   •  The company shall enter into contract with a WPS agent that is  approved and authorized by the
     Central Bank of the UAE to provide this service, be it a bank, bureau de change , or a financial institution;
   • The employer shall issue instructions to its bank to transfer wages to workers. Instructions shall be
     accompanied by a detailed wages list and a copy of the list shall be sent to the agent.
   •  The WPS will send workers’ details and wages as well as the salary transfer instructions electronically to the
      Central Bank of the UAE, who  will then forward those details to the Ministry of Labour database in order to
      make sure that the details received correspond with those registered with the Ministry;
•   The WPS will send the approved information to the appointed agent in order to start paying the wages.