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Introduction
Wage Protection System or WPS
is an electronic salary transfer system that allows organizations to pay
employees’ wages through banks, bureaux de change and other authorized financial
institutions. It is an 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 their employers.
The system developed by the Central Bank of the UAE, in
September 2009, allows Ministry of Labour to develop a database that records wage
payments in the private sector to guarantee the timely and full agreed wages to a
all employees of any organization.
WPS targets the following parties
from the Ministry partners:
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 is mandatory
WPS is made mandatory by the Ministry of Labour to ensure fair and timely wages
to all employees, requires every employer to choose any registered agent (banks,
exchange houses and financial institutions) to join the WPS.
Dates
The deadline for implementing the WPS depends on the size of the company. Firms
with more than 100 workers should register before November 30, 2009; companies
with a workforce of 15 to 99 by February 28, 2010; and companies with less than
15 workers before May 31, 2010. Companies failing to meet the deadline will be
denied new work permits and employees will not have any means to draw their
salaries.
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