UAE decree to ensure workers paid on time

The Ministry of Human Resources and Emiratisation has issued a new decree to ensure employees’ wages are fully paid within a period not exceeding 10 days from the due date registered in the WPS (wage protection system).

The decree shall commence October 2016.

Saqr Ghobash, Minister of Human Resources and Emiratisation, pointed out that companies employing over 100 workers must pay wages within a period not exceeding 10 days. If they fail, the ministry will stop granting them any additional work permits starting from the 16th day from the date of delay.

“Two main things should be considered in this matter, firstly, salary delays occur usually if the company fails to pay wages a month from the due date, the second, which refers to completely refraining wages, starts after entering into the second month, however, the decree shall refer to each case in a different matter,” he said.

The decree states that if a company delays wages a month from the due date, which means the company has entered into the refrainment phase, the ministry shall inform the judicial authorities and other related parties to take all necessary punitive measures against it, causing a complete strike against the other companies owned by the same employer, plus prohibiting the employer the ability of registering any new companies.

Furthermore, if a company continues to refrain paying wages, the ministry shall take necessary measures to use the bank guarantee, in addition to downgrading the company into the third category and enable the workers to move to another company.

“If the company fails to pay wages for 60 days from the due date, then administrative fines shall follow, not forgetting the punishments that had been already slapped for failing to pay wages a month from the due date,” Ghobash added.

Administrative fines hit Dh5,000 per worker’s delayed wage, reaching a maximum of Dh50,000 in cases that include multiple workers complaining about delayed wages for over 60 days.

On the bright side, the ministry shall lift the ban from violating companies, granting them the ability to apply for new work permits, only if they immediately pay delayed wages during the first delay month, while the ban lasts for 60 days for companies that failed to pay wages for more than two months and then pay.

The decree reiterates that if the company often refrains from paying salaries, the ban duration doubles after paying the wages.

Additionally, if the ministry came across any sorts of salary delays or refrains by companies that employ less than 100 workers, the current regulations shall apply, from work permits bans to fines and then public trial referral if the company fails to pay the money within 60 days, however, if the company notes such violations more than once in one year, then, in this case, the ministry shall apply penalties stated for companies that employ over 100 workers.

The decree clearly states the ministry shall not proceed with any transactions with companies that did not register in the WPS, or deal with the owners of these companies until they register with the system, so as to ensure workers’ rights have been met.

Source Gulf News : http://gulfnews.com/news/uae/government/uae-decree-to-ensure-workers-paid-on-time-1.1868606

Labour Minister issues decree to enforce Wages Protection System

All institutions registered under the Labour Ministry will, from September this year, start paying workers' wages and salaries through the newly introduced Wages Protection System (WPS).

Labour Minister Saqr Gobash Saeed Gobash has issued an order enforcing the new system, which involves transfer of salaries through selected financial institutions, authorised and regulated by the government.

The move, which is in implementation of cabinet decree number 133/1, is aimed at boosting transparency and stability on the labour market. It also seeks to protect the rights of workers in the country.

Gobash and the UAE Central Bank Governor, Sultan Bin Nasser Al Suwaidi, recently launched the WPS, under which the employer can choose any registered agent to participate in the WPS.

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On receiving details about workers' wages, the bank or institution sends the information electronically to the WPS. The WPS sends the salary file to the agent for payment, and the agent pays the employees.

The system will also supply the Labour Ministry with the necessary data pertaining to all salary and wage payments in the private sector.

Gobash said: "The WPS reflects the UAE's pioneering position in the region, and will increasingly project the country as a model worth emulating in the area of boosting the rights of workers.

"It is our ethical and legal responsibilities to always strive to come up with innovative means of implementing our leadership's policies which aim at providing secured and stable environment and at protecting the rights of all segments of the society."

A dedicated WPS Office in the Labour Ministry will ensure that the process is functioning smoothly. The workers will not face any deductions or charges in salaries because of the WPS.

The decree also sets deadlines for various categories of business institutions in the country to comply with the WPS. Institutions with 100 or more employees have till the end of November to comply with the new system.

Institutions with 15 to 99 employees have to comply by the end of February 2010, while institutions with 15 or less employees have their deadline set for May 31, 2010.

Acting Director General at the Labour Ministry, Humaid Bin Deemas cited a number of positive aspects of the system, including saving of money, time and energy, boosting production and employee loyalty.

He described the new system as "most appropriate", saying it will save both the employees and their employers the trouble of having to keep huge amounts of money at their workplaces.

Bin Deemas said the Labour Ministry was committed to working very closely with all concerned with the aim of reaching the best mechanism that would equally protect the interest of all parties.

He said even before the issuance of the new decree, the response to the WPS was very positive as the system transfered the wages of about 28,000 workers in June.

Stringent penalties

Cabinet decree number 133/1 states that institutions which provided false information regarding employees' wages or salaries will suffer consequences, including court action.

In addition, it will be denied the right to have a new work permit, which shall remain in force until after the court proceedings.

Any institution which fails to transfer payment of its employee to the WPS on time will also have its work permit transactions blocked until it transfers the full payment of the wages.

A repetition of these two violations will lead to more punitive action. The institution shall forfeit the right to have a new work permit until after one month of rectifying the violation.

A third violation will result in the processing of new work permit being suspended for two months, while a fourth violation will attract a three-month suspension.

The decree mandates the Labour Ministry to stop issuing new working permits to institutions which violate the decree frequently.

These institutions are to be referred to court and no work permit is to be issued to the company, or any of its subsidiaries, or other companies owned by the owner of the violating company, until after the court proceedings or after the errant company has rectified the violation, whichever comes first.

The decree abrogates ministerial decree number 156 of 2003, which mandates institutions to produce an auditor's certificate.

UAE companies to pay workers’ salaries through WPS

In an effort to curb delayed salary payments, the Labor Minister, Saqr Ghobash, issued a decree enforcing the recently introduced Wages Protection System (WPS), reports WAM. All companies registered with the Labor Ministry will be required to begin salary payments to its employees through the WPS in September 2009.

“The WPS reflects the UAE’s pioneering position in the region, and will increasingly project the country as a model worth emulating in the area of boosting the rights of workers,” explained Ghobash. “It is our ethical and legal responsibilities to always strive to come up with innovative means of implementing our leadership’s policies which aim at providing secured and stable environment and at protecting the rights of all segments of the society,” he added.

A dedicated WPS Office in the Ministry will ensure that the process is functioning smoothly. The workers will not be subjected to any deductions or charges to get their salaries.

The decree gives deadlines for the various categories of business institutions in the country to fully comply with the new system. According to the decree, institutions with 100 and above employees have three months to comply fully with the new system with the deadline slated for the end of November. Institutions with 15 to 99 employees have six months to complete the process with the deadline for this category set at the end of February 2010, while institutions with 15 or less employees have their deadline set for May 31, 2010.

Shedding more light on the new system, Acting Director General at the Labour Ministry, Humaid bin Deemas, said the WPS is aimed at entrenching transparency and competitiveness on the labour market and cited a number of positive aspects of the system, including saving of money, time and energy, boosting production and employee loyalty. He described the new system as "most appropriate", saying it will save both the employees and their employers the trouble of having to keep huge amount of money at their work places, which put those monies at high risk.

Bin Deemas said his outfit was highly committed to ensuring the full implementation of the new system and to working very closely with all concerned stakeholders in the system with the aim of reaching the best mechanism that would equally protect the interest of all parties.

He said even before the issuance of the new ministerial decree response to the WPS was very positive as the system transfered the wages of about 28,000 workers in June. He attributed the success to the good and hard work of the task force in charge of supervising the system. The task force is made up of two representatives from both the Labour Ministry and the Central Bank.

Regarding penalties, the decree states that institutions which provided false information regarding the wage or salary of its employee will suffer consequences, including court action, in addition to denying that institution the right to have new working permit, which shall remain in force until after the court proceedings.

Any institutions which fails to transfer payment of its employee to the WPS on time will also have its working permit transactions blocked until several days later from the time it made the transfer of full payment of the wages.

A repetition of the two above violations will lead to a more punitive action against the violating institution, which shall forfeit the right to have new working permit until after one month of rectifying the violation. Repeating any violation for the third time will attract two months suspension of processing of new working permit for the violating institution, while a fourth violation will attract three months suspension until the violation is rectified.

The decree mandated the labour ministry to stop issuing new working permit to any institution which violated a complete unit of rules of the new decree and refer those responsible to court to face the consequences of incessant violation of the system. In this case, no working permit would be issued to the company, or any of its subsidiaries, or other companies owned by the owner of the violating company, until after the court proceedings or after the errant company had rectified the violation, whichever comes first.

The decree abrogates Ministerial Decree no. 156 of 2003, which, among others, demands from institutions to produce auditor's certificate.

Source: WAM/SA

UAE Government launches wage protection system for workers

Companies defaulting on salaries will soon be a thing of the past as the UAE government launched its Wages Protection System (WPS) on Tuesday.

In yet another significant stride to further protect the rights of those employed in the country, the new system will benefit over four million employees when fully implemented.

WPS is an initiative to safeguard payment of workers' wages via transfers through selected fin-ancial institutions, that will be authorised as well as regulated by the government.

"UAE businesses will now adhere to timely wage payments at the exact amounts agreed with employees," said Saqr Gobash, minister of labour.

"This initiative greatly enhances our ability to implement preventive measures to reduce labour disputes pertaining to wages and will offer solutions that will guard workers and employers against keeping large amount of cash at work places," he noted.

The minister officially launched the system alongside Nasser Al Suwaidi, the Central Bank Governor, who said that the system is based on the latest technology and that it allows for future upgrades.

With WPS the Ministry of Labour (MOL) would know at real time whether or not salaries have been paid out in full and on time. Defaulting companies could then be easily identified and penalised.

If the wages paid are not the same as those agreed by the employer on the job contract, then those employers could be easily brought to book, officials told Gulf News.

Compliance with the WPS is mandatory for all businesses operating in the UAE; however, no particular deadline has been fixed yet. The time frame of WPS implementation and penalties will be issued as a ministerial decree shortly.

Companies failing to integrate WPS will not be eligible for new work permits, Gobash warned.

Reaffirming the government's commitment to safeguard the interests of both workers and the employers, Gobash said that the system offers wage protection to unskilled workers who are in desperate need of such protection.

Currently, official estimates put the number of workers who receive their wages electronically at 500,000.

"The system reflects the government's willingness to safeguard the basic rights of all concerned parties," he said, adding that it will enhance the stability of the labour market.

"The employer can choose any registered agents to participate in WPS. Once the customers bank or company receives information about the workers wages, this information will be sent electronically to WPS. WPS will then send the salary file to the agent for payment. Agents then pay the employees", Babu Santhanam, Senior IT manager at the Central Bank explained.

A dedicated WPS office in the ministry aims to set up and implement a comprehensive system to ensure wages are paid on time, to guarantee legitimate working hours are adhered to and implement the wages transfer project through banks and other financial institutions.

A Cabinet decision two years ago proposed the implementation of an electronic wage payment system. This federal order was to be implemented from January 2008.

However, businesses cited practical difficulties such as unwillingness of some banks to open accounts for low-income workers. The system was thus on hold until the Central Bank supported MOL to reach a solution in the form of WPS.

Jargon: WPS explained

- What is WPS and where will it be hosted?

It is an electronic system initiated by the Labour Ministry in association with UAE Central Bank. It is hosted at the Central Bank.

- How does it work?

The employer can choose any registered agents to participate in WPS. Once the customers bank or company receives information about the workers wages, this information will be sent electronically to WPS. WPS would then send the salary file to the agent for payment. Agents then pay the employees.


- Can the employer choose any financial service provider as its agent?

No, the employer can only choose financial service providers like banks, money exchanges or service providers that are registered and approved by the Central Bank.

- Is paying wages through WPS mandatory?

Yes, WPS is mandatory according to a Cabinet decision which requires that all workers' salaries be paid using regulated channels. A ministerial decree will be issued shortly announcing the deadline.

- Will there be penalties for not using WPS?

Defaulting companies will not be eligible for new work permits. While officials have warned of further disciplinary action, details on the penalties will only be announced in a decree later.

- Will workers have to pay to get their salary electronically or otherwise?

No, the workers will not have to go through any charges or deductions to get their salary. In order to use the services of agents in disbursing the salary, employers will get tied up with banks, money exchanges etc.

Unified system to safeguard workers against manipulation

A unified payment system for workers and the Ministry of Labour's emphasis on cracking down on non-complying companies will push the implementation of the Wage Protection System (WPS), financial institutions which will provide the service said.

The Ministry of Labour in coordination with the central bank yesterday launched WPS, an initiative to safeguard workers' salaries via transfer through selected financial institutions.

Nabil Bader, CEO of Waseela Equity, one of the payroll service providers in the country, and the process of getting linked to WPS, said "the implementation of the decision with the introduction of the new system will be more effective because the whole country will have a unified system for payment of workers' salaries, which is monitored by the central bank and Ministry of Labour, as well as the ministry's insistence to follow up on the implementation by companies."

The company currently has 100,000 workers in 18 companies paid through them.

"Since the Minister of Labour made the announcement of the launch of the new system about a month ago, there has been a massive increase in the number of requests for our services," Bader said.

Ministry to monitor salary payment

Ministry to monitor salary payment

The electronic wage payment system will make it easier for the labour ministry to check on companies that do not pay workers on time, said the minister on Wednesday.
"With the implementation of the electronic wage payment system by January, the ministry will be able to instantly check the status of payment of salaries to employees of the companies functioning in the country. This will ensure the timely payment of salaries. However, at the moment, we have no plans of fixing the minimum wage for labourers," said Dr Ali Bin Abdullah Al Ka'abi, the Labour Minister.
"With the new system, it will make it easier for the ministry to check on companies that do not pay on time. These companies will be flagged and repeat offences will result in stringent measures against the company," the minister said.

Cabinet decision

He was speaking following the signing of a Memorandum of Understanding with a US-based technology company called InfoSpan Gulf for electronic salary disbursement.
Similar MoU's were signed with companies like Workers Equity, Islamic Finance Company,UAE Exchange, Western Union, and Empost, by the ministry following the cabinets decision in June to make all salary payments electronic.

The Islamic Finance Company (IFC) has signed an agreement (October 7th) with the Ministry of Labor (MoL) to start implementing the 'Daman & Aman' program in the United Arab Emirates. The agreement comes as part of the ministry’s continuing efforts to develop and enhance the quality of its services as well as meeting the basic requirements of laborers.
The signing ceremony, which was held in the MoL premises in Abu Dhabi, was attended by H.E Dr. Ali Abdulla Al Kaabi, UAE Minister of Labor and Mr. Gaith bin Hamel Al Gaith, member of IFC Board of Directors.

During the signing ceremony, H.E Dr. Ali Abdulla Al Kaabi said: “In the past years, the MoL has put a lot of effort in finding the appropriate conditions and techniques to provide the best services. The agreement comes as part of our continuous efforts to develop and initiate a new mechanism to control, manage, and enhance the quality of our licensing process. With this agreement, the IFC and the MoL seek to create and form a constructive cooperation in fields related to labor and laborers.”

According to the agreement, the IFC will provide the MoL with a number of services including following up and organizing the payroll, submitting social audits for the facility explaining the companies commercial and managerial performance, and its abidance with the UAE labor laws. The IFC will also pay the salaries of laborers through installing ATM machines in labor camps and will also send mobile units equipped with ATM machines to the sites. Furthermore the company will provide the MoL with the necessary data and report any labor law violations.
On the other hand, the ministry will facilitate the services of 'Daman & Aman' clients and will provide the IFC with the necessary database to provide these services electronically. The IFC was established in 2006 and is based in Dubai. The IFC is a financing company as well as a Holding with a number of companies under its supervision.

Unskilled workers can stay for 6 years: Al Ka'abi

Unskilled foreign workers and domestic help will be allowed a maximum stay of six years in the UAE, the Minister of Labour said yesterday.

Speaking to Gulf News from Geneva, Dr Ali Bin Abdullah Al Ka'abi said a total of 2 million unskilled workers will be considered "temporary contractual workers under an agreement with the International Organisation for Migration (IOM)".

"The UAE will receive an official document from the IOM recognising the change of the workers' position from being immigrants to temporary contractual workers," Al Ka'abi said.
"This will allow the country to proceed with rules making the maximum stay of workers six years an initial stay of 3 years to be renewed only once for a similar period," he said.

Medicals for UAE-bound workers

Expat workers who wish to take up jobs in the UAE will also undergo medical tests in their countries to ensure they are free from contagious diseases, the Minister of Labour told Gulf News yesterday.
Speaking to Gulf News from Geneva, Dr Ali Bin Abdullah Al Ka'abi, Minister of Labour, said no time-frame has been fixed to implement this. It follows an agreement with the Geneva-based International Organisation for Migration (IOM).
Al Ka'abi is in Geneva to attend the 95th Conference of the International Labour Organisation (ILO).
At present, he said, workers undergo health tests in the UAE and many who test positive for such illnesses run away posing a major threat to the country.
Al Ka'abi said GCC countries would continue to work closely with the countries the workers were travelling to, to ensure decent conditions.
"Participants in the annual International Labour Organisation conference also recognised the need to pay attention to problems faced by employers in GCC countries when recruiting overseas workers."
He said a total of two million unskilled workers would be considered "temporary contractual workers" under an agreement with the International Organisation for Migration. The UAE will receive an official document from the IOM recognising the change of the workers' position from being immigrants to temporary contractual workers, Al Ka'abi said.
"This will allow the country to proceed with rules making the maximum stay for [unskilled] workers six years an initial stay of three years to be renewed only once for a similar period."
Al Ka'abi was speaking following a meeting with Brunson McKinley, Director-General of the Geneva-based organisation.
In his speech at the 95th Conference of the ILO on Monday, Al Ka'abi said foreign workers in the six GCC countries were temporary and not immigrant workers.
"They are hired to temporarily perform specific labour or services. Once this is completed they return to their home countries in accordance with rules of the countries of origin and the destination countries," he said.