Understanding the UAE's Wage Protection System
The government of United Arab Emirates (UAE) has implemented various measures to ensure fair labour practices and protect the rights of workers. One of these is the Wage Protection System (WPS) which was launched in July 2009. We believe it is important for both employers and employees to understand the particulars of salary disbursement in the UAE.
What is the Wage Protection System?
The UAE Ministry of Human Resources and Emiratisation (MOHRE) introduced the Wage Protection System, a comprehensive electronic salary transfer system to ensure that employers transfer salaries to their employees through a secure and transparent electronic channel.
How Does the WPS Work?
The WPS is mandatory for all establishments in the private sector and employers are required to register their employees in the WPS to guarantee timely and transparent salary payments.
Under the WPS, employers must transfer salaries directly to their employees’ bank accounts. This guarantees efficiency, accuracy and security in salary disbursements. Employers are required to submit monthly salary information to the WPS database, including basic salary, allowances and any deductions.
Benefits of the WPS
The WPS ensures that employees are paid on time, assuring their financial stability and security. The system also improves transparency in financial interactions between employers and employees by digitising salary transactions, and companies are held accountable for timely salary payments as well as accurate reporting.
Non-Compliance with WPS
As compliance with the WPS is a legal requirement, failure to adhere may result in penalties and fines for employers. Failure to disburse salary on time can result in work permit bans, fines up to AED 5,000 per worker and other legal implications. Similarly, imposing false information or generating fraudulent payment slips carries similar penalties.
Companies that do not adhere to WPS regulations may experience a tarnished reputation, challenges in attracting talent, and potential business restrictions.
WPS Compliance Made Easy
If you’re looking for a smarter way to manage your corporate payroll, Al Ansari Exchange offers a comprehensive solution that allows businesses to streamline operations, enhance employee satisfaction and ensure complete compliance with WPS regulations.
The PayPlus Card offers free cash withdrawals, global accessibility and secure transactions. Employees’ salaries are conveniently processed through the eExchange.ae portal, with a dedicated call center for assistance. Additional charges only apply after two attempts for certain transactions at FAB ATMs.
For unlimited withdrawals and enhanced security, the PayRoll Card is your solution. Accepted at any of the 250+ Al Ansari Exchange branch in the UAE, this card provides a seamless payroll experience. Employees can conveniently process their salaries through the online portal, eExchange.ae, with the added benefit of a dedicated support team and zero issuance fee.
To register your company, please download and fill out the WPS Form and submit it, together with the documents indicated therein, at any of our branches.
The Impact of WPS
The WPS helps prevent disputes and grievances related to unpaid wages by facilitating timely and accurate payment.
Beyond payroll management, the system upholds fair work practices in the UAE. Its significance extends beyond ensuring timely and secure salary disbursement, reflecting the UAE government’s commitment to nurturing a workplace culture grounded in fair labour standards.
The WPS acts as more than just a mechanism for financial transactions, the WPS echoes the broader societal values that the UAE government aims to instil within workplaces across the country. By ensuring that workers are paid fairly, the WPS contributes to a stable and productive workforce, which is essential for the UAE’s economic development.