UAE companies that delay salary payments will face asset seizures and travel bans; a new measure to combat wage payment delays.

The Ministry of Human Resources and Emiratisation (MoHRE) has announced a series of new measures to ensure the timely payment of 37 billion AED in salaries and wages each month.

The UAE Ministry of Labor announced on Thursday that the implementation of new stringent measures regarding delays in employee salary payments will "intensify oversight." The ministry also revealed that last year, 60 million warnings and notices were sent to private sector companies that failed to pay employee salaries on time.

Based on changes implemented from June 1 in the Wage Protection System (WPS), authorities will act much earlier than before against companies that violate the regulations.

In a press conference, the Ministry of Human Resources presented a list of progressive penalties for employers who delay salary payments; these penalties start from financial fines and suspension of work permits and escalate to asset seizures and travel bans in case of repeated violations.

The ministry stated that over 37 billion AED in salaries and wages are paid each month by approximately 600,000 private companies; a situation that indicates that delays in salary payments can affect a very large number of workers and employees.

According to the new regulations, the previous 15-day grace period for violating companies has been reduced to 10 days. This change will take effect from the salary payment for June, specifically on July 1.

Khalil Al Khouri, the Assistant Undersecretary for Labor Market Operations and Emiratisation, said on Thursday:

> "Companies will receive notifications and emails to remind them to pay salaries."

He added:

> "These changes strengthen the Wage Protection System and make oversight of salary payments stricter. Each month, 37 billion AED in salary transactions are conducted by private sector companies to employees."

> "This new decision does not create major new obligations for employers. This system provides a stable and transparent environment for work and supports the UAE's position in attracting talent and skilled labor."

Al Khouri stated that the ministry will monitor all private sector businesses to ensure compliance with the regulations.

He added:

> "We will send warnings and notifications to violating companies. Last year, we issued over 60 million notifications and emails for companies that delayed salary payments."

He warned that if salary payment delays continue, legal actions may be taken; especially in sectors with a large workforce.

He said:

> "This mainly includes labor-intensive sectors such as construction, transportation, security services, maintenance, and cleaning services."

What are the new regulations?

From the salary payment due date, the ministry will electronically monitor all companies to ensure compliance with the regulations.

Day Two

If salaries are not paid within two days after the due date, the ministry will begin sending warnings and notifications.

Day Five

If salaries are still unpaid, the issuance of work permits for the company will be halted.

Day Eleven

Companies that commit violations again within a six-month period:

Will be fined.

Will be downgraded to the third category of companies in the ministry.

Day Sixteen

Penalties will become stricter:

Labor disputes will be automatically registered for affected employees; whether individually or collectively.

The issuance of work permits for violating companies, especially those with at least 25 workers, will be halted.

Day Twenty-One

The most severe actions will be taken:

The ministry may issue an executive order for salary payments.

The process of precautionary asset seizure for the company will begin.

Travel bans will be imposed on company managers.

Additionally, companies with 50 or more employees and those that repeatedly violate regulations may be referred to the prosecutor's office; especially if authorities determine that these violations could threaten labor market stability.

What is the Wage Protection System?

The Wage Protection System (WPS) was launched in 2009 by the Ministry of Human Resources and the Central Bank of the UAE to ensure that private sector employees receive their salaries correctly and on time.

The new decree further strengthens oversight of this system.

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