Salary plan on track for low-wage earners in UAE

Dubai: With two days to go for the official launch of a nationwide salary protection system to ensure that labourers get paid on time, some companies are yet to comply with a federal government order to pay workers through banks across the UAE.

The federal order was to be implemented from January 2008 but some companies, have cited difficulties in finding banks which are willing to open accounts for low income workers as the reason for the delay.

Saqr Gobash Saeed Gobash, Minister of Labour, told the Federal National Council (FNC) last week that the non-compliance forced the ministry to work together with the central bank to develop the new mechanism.

"The system will be launched on May 26 in a joint effort between the ministry and the central bank," Gobash said during a council session.

More than three million low-income people will find it easier to open a bank account thanks to the electronic Wages Protection System, which will enable the ministry to monitor companies' payment systems and create a complete database of the labour workforce.

Many employers, especially those with small number of workers, have said they faced difficulties in implementing the 2008 order.

Mousa Nasar, General Manager for Al Mu'tared for maintenance and General Contracting, whose 350 workers are still paid in cash, said: "We tried to pay our workers' salaries through many banks but many of them refused as it is too costly to maintain these accounts."

Arabtec construction, with about 40,000 workers, pays its workers through a financial service provider, because it costs far less.

Shakil Rajguru, payroll manager at Arabtec, said it faced difficulties in training workers on how to use ATMs. Gobash told the FNC that strict action will be taken against firms which do not follow the new mechanism.