Expatriates from over 200 countries are settled in the UAE. Most of these ex-pats are employed in UAE contributing their skills and expertise in the country’s economic development. Whether you partner with an HR outsourcing company for various HR solutions in Dubai or have an in-house team of professionals, your human resources will always be the most essential asset in your business, so keeping them satisfied should be one of your major goals.
Quick Enquiry
[lcf_contact_form form_type=”Quick Enquiry” ]
In 2019, the government launched the Wage Protection System to make payments and wage distribution among employees easier. In this blog, we are going to learn everything you need to know about WPS and its registration process.
WPS or Wage Protection System in UAE was launched in 2019 with a joint effort by the Central Bank of the UAE and the Ministry of Human Resources and Emiratization (MOHRE). WPS is one of the advanced HR solutions which is an ultramodern electronic system through which companies from the private sector transfer the salaries of their employees through banks and other approved financial institutions.
In this system, the Ministry of Human Resources and Emiratization or MOHRE grants companies from the private sector a platform where they maintain files containing crucial information about each of their employee’s salaries to ensure timely payment of wages and dues. At the time of payment of wages, companies are supposed to send these files to their respective banks for smoother and easier processing of payments.
For most companies in UAE, it is mandatory to register for WPS. All companies must register for WPS:
Companies who fail to comply or don’t pay the salaries within 10 days of the payment due date may receive hefty fines and also get a block on visa processing of new staff in the company.
Read also: Benefits of Outsourcing Your HR Department in UAE
All companies from the private sector can easily register for the Wage Protection System in UAE. The procedure to register your company is smooth and can be done online through the website of the Ministry of Human Resources and Emiratization using the required details of the company.
Once the account is created, employers can submit the files containing the salary details of their employees.
According to guidelines by the Ministry of Human Resources and Emiratization:
“Salary month cannot have a difference of more than one month from the dates chosen to pay the salary”
“Whenever an employee joins or leaves the company, you will need to download a new employee list and attach it to the application”
Read also: How HR Outsourcing Companies in UAE Help Businesses
Once the company has created the account with WPS successfully and listed the details of employees and their salaries, the next step is to process the payments making sure the following steps are check-marked:
Step 1: The company needs to open a bank account with an approved bank or financial institution in case the bank is outside the UAE
Step 2: The company will have to sign up for a WPS agreement with the bank or financial institution
Step 3: The company can then issue instructions to the bank or financial institution regarding salary transfers
Step 4: The bank then notifies the WPS in UAE which further sends the details of employees and their salaries through an electronic system to the Central Bank of UAE
Step 5: The Central Bank of UAE forwards the details to the Ministry of Human Resources and Emiratization (MOHRE) for verification
Step 6: Once the verification from MOHRE is done, WPS issues a notification of authorization to the company’s bank or financial institution to go ahead and pay the salaries to the employees.
Payroll Middle East is one of the best companies providing PRO services to businesses in the Middle East region. Our core services include payroll outsourcing services, HR outsourcing services, and other related legal services through which we help businesses set their feet in the Middle East market. Our legal services enable businesses to comply with laws and regulations in the markets of Saudi Arabia, UAE, Kuwait, Qatar, Bahrain, and Oman.
If you have just entered your business in the UAE market, let us guide you with everything you need for the establishment of your company. We have an excellent team of legal consultants and accounting professionals along with consultant partners throughout the Middle East region who have more than 35 years of experience.