If your salary is delayed, these are the penalties your company could face
Companies that fail to pay salaries on time will be banned from issuing work permits
Dubai: If your salary is delayed or has arrived late, your company could face action and heavy fines for failing to pay their employees’ wages on time.
The new labour law decree - ‘Ministerial Resolution No. ( 43 ) of 2022 - Regarding Wages Protection System’, which was issued by The Ministry of Human Resources and Emiratisation (MoHRE), highlights the action that will be taken against companies that fail to pay their employees on time.
All commercial establishments registered with MoHRE must pay their workers’ wages on time through the Wages Projection System (WPS). WPS is a database that ensures those working in the UAE are paid fully and on time.
For a more in-depth analysis on how WPS functions, read our comprehensive report here.
If you are facing this predicament of unpaid or late salaries, your employer could face serious repercussions for not complying with WPS. Here is the list of penalties outlined by MoHRE under their new labour law decree.
Penalties for failing to pay employees’ wages on time
As per Ministerial Resolution No. ( 43 ) of 2022 - Regarding Wages Protection System, these are the following actions that will be taken against establishment that fail to pay workers’ wages on their due date:
1. Deadline: On the due date
Action: The establishment will be monitored electronically to ensure its compliance with the payment of wages of its workers.
2. Deadline: On the third and tenth day after the due date
Size: All establishments
Action: Sending reminders and notifications to the non-compliant establishment to pay the wages
3. Deadline: On the seventeenth day after the due date
Size: All establishments
Action: Suspension of the issuance of new work permits for the establishment. A notification will be sent to the establishment owner stating the reason for the suspension.
The non-compliant establishment will be listed in the electronic monitoring and inspection system and inspection visits scheduled. An inspector will conduct inspection visits, and duly issue warnings (for establishment employing more than 50 workers).
4. Deadline: 30 days from the due date
Size: All establishments
Establishment employing 500 workers and above and high-risk establishments according to the Ministry's classification
Action: Relevant Public Prosecution will be notified, and information about the establishment will be communicated to the competent authorities at federal and local level for further legal action. The establishment will be followed up by the concerned teams in the Ministry.
5. Deadline: 45 days from the due date
Size: Establishment employing 50 to 499 workers
Action: Relevant Public Prosecution is notified and information about the establishment will be communicated to the competent authorities at the federal and local level for further legal action and will be followed up by the concerned teams in the Ministry.
6. Deadline: 60 days from the due date
Size: All establishments
Action: The ban on the issuance of new work permits remains in force for the violating establishment including suspension of issuance of work permits for all other individual or exclusively owned companies by the owner of the offending company, on the condition that partners in all the companies are the same.
7. Deadline: In the event that the establishment repeats the violation or accumulates more than one violation
Size: All establishments
Action:The non-compliant establishment will be listed in the electronic monitoring and inspection system and the inspection visits schedule, and will be liable for the following penalties:
• An administrative fine will be imposed in accordance with Cabinet Resolution No. 21 of 2020.
• Downgrading the establishment to the third category.
8. Deadline: Failure to pay a worker’s wage for more than 3 consecutive months.
Size: All establishments
Action
• Electronic notification will be sent to the facility
• The ban on new work permits remains in force.
• Renewal of the work permit of a worker who has not received his wages shall be suspended unless his or her status is duly modified
• If the failure to pay wages continues, an inspection visit to the facility will be conducted after 6 months from the date of non-payment, in order to ensure the existence of the employment relationship. In case there is no active employment relationship, the violating establishment will be referred to the Public Prosecution and an administrative fine will be imposed in accordance with Cabinet Resolution No. 21 of 2020, further coordination with other concerned authorities will also take place regarding the imposition of relevant fines as per the rules.
Fines
Failing to abide by MOHRE’s WPS, companies in the UAE can face steep fines and penalties. According to the Cabinet Resolution No.21 Of 2020, these fines apply for actions involving fraudulent use of the WPS:
If the establishment forces the worker to sign fictitious documents stating that they have received their wages or entering incorrect data into the Wages Protection System:
• Dh5,000 per worker
• Maximum of Dh50,000 in case of multiple workers.
Failure to pay workers’ wages via the Wages Protection System:
• Dh1,000
• Maximum Dh20,000
How can I approach the Ministry to complain against unpaid salaries?
MOHRE has a toll-free hotline - 800 60 - which you can call to follow up on any complaints or transactions that you may have with the Ministry.
For Labour complaints and legal inquiries and advice, the Ministry has also set up a Labour claims and advisory centre. To contact the centre, to know more about your rights as an employer or an employee, you can call 04 665 9999.