What is WPS (Wage Protection System)

/ Payroll

What is WPS (Wage Protection System)

WPS is a electronic transfer system that allows employer to make payment of wages through banks, bureaux de change and financial institution.  WPS is developed by Centeral bank by of UAE that allows the ministry of labour to create a database of wage payments in the private sector to guarantee the timely and full payment of agreed-upon wages.The WPS covers all institutions registered with the Ministry across all sectors and industries and will benefit different categories of labour.

Parties Involved for WPS

  • Workers
  • Employers
  • Banks
  • WPS Agents
What is WPS (Wage Protection System)

Basic Requirements

  1. Company needs to be registered with the Ministry of Labour.
  2. They should have a bank account with one of the banks operating in the UAE
  3. The company should enter into a contract with agent (bank, bureau de change or financial institution approved by central bank of UAE.
  4. Workers’ wages will be transferred via WPS as per the deadlines specified in the Ministerial Resolution No. 788 of 2009. Institution will have to transfer workers’ wages via WPS within two weeks of their due date, or on the dates specified in the work contract if wages are paid more frequently than monthly.
  5. The employer will bear all expenses incurred upon joining WPS, including bank fees, service provider charges, and all other costs. Employers are not allowed to share any costs with workers’ by any means, including deducting from their wages, directly or indirectly.

Benefits

  1. Streamline of Payroll and salaries functions.
  2. Evidence that salaries and wages have been paid on time, it is important if there is any labour dispute.
  3. It promotes transparency and ensures trust between business and their employees.

Consequences of failing to join WPS

  1. Institutions failing to transfer workers wages by the deadlines specified above will be denied the right to have new work permits. This ban will only be lifted in the month following the transfer of workers’ wages in full.
  2. Institutions that delay wages’ payment more than one month of the due date will be denied the right to have new work permits, along with all institutions owned by the owner of the violating institution, and to refer all those responsible for the violation to the court, in accordance with Ministerial Resolution No. 788 of 2009.