600,000 UAE firms to implement enhanced wage protection rules

Dubai: More than 600,000 private-sector establishments across the UAE will operate under an enhanced Wage Protection System from 1 July, with authorities seeking to strengthen wage compliance, improve labour market governance and reinforce the country's appeal to global talent.

The Ministry of Human Resources and Emiratisation said the updated framework will apply to June salaries paid from July onwards, marking the formal implementation of a decision designed to improve oversight of wage payments while maintaining a gradual and balanced regulatory approach.

Speaking during a media briefing, Khalil Ibrahim Al Khoury, Undersecretary of the Ministry of Human Resources and Emiratisation for Labour Market and Emiratisation Operations, said the Wage Protection System is one of the key pillars supporting labour market stability in the UAE.

He said the system not only promotes transparency, and safeguards workers' rights but also enhances compliance across the business environment by ensuring wages are paid on time and by strengthening confidence in the labour market.

The ministry said the Wage Protection System currently covers around 99 per cent of private-sector workers and manages monthly wage transfers exceeding Dh37 billion through a network of more than 90 banks and exchange houses.

It noted that compliance levels among employers remain high, with many companies choosing to pay workers before the Eid Al Adha holiday and ahead of the usual payment schedule at the beginning of the month.

The new decision introduces a structured monitoring framework based on risk assessment and graduated enforcement measures. Authorities said the approach is intended to give companies sufficient time to rectify delayed payments before regulatory action is taken.

Under the system, cases of delayed wage payments will first be identified through electronic monitoring, followed by notifications and direct communication with employers. Preventive measures, including restrictions on certain services, may be applied only if non-compliance persists, with further escalation occurring gradually when necessary.

The ministry said the framework aims to reduce labour disputes and work stoppages while supporting the continuity of business operations.

Al Khoury stressed that the updated measures do not create significant new obligations for employers but instead enhance governance, monitoring procedures and the efficiency of follow-up mechanisms linked to wage payments.

Particular attention will be given to labour-intensive sectors such as construction and maintenance, where delayed salary payments can have a broader impact on employment stability and operational continuity.

According to the ministry, an establishment will be considered compliant if it transfers at least 85 per cent of total wages due. Officials said the threshold provides flexibility for operational circumstances such as employee leave, illness and legally permitted deductions, while maintaining protection for workers' rights.

The ministry also highlighted its extensive engagement with employers, noting that more than 60 million interactions with companies were recorded during 2025 through text messages, emails and telephone calls.

Dalal Saeed Al Shehhi, Assistant Undersecretary for Labour Market and Emiratisation, said the revised system is designed to strengthen governance without imposing new substantive burdens on businesses. She added that the measures seek to increase compliance while balancing the interests of workers and employers and supporting labour market stability.