UAE Introduces New Wage Protection System Rules Effective June 1st 2026

This is to announce that the Ministry of Human Resources and Emiratisation (MOHRE) has officially issued Ministerial Resolution No. (340) of 2026 concerning the Wage Protection System (WPS), which will come into effect from 1 June 2026. This resolution introduces enhanced compliance requirements and stricter enforcement measures to ensure timely salary payments across all private sector establishments in the UAE.

Key Highlights of the Resolution

• Mandatory Salary Payment Timeline
  Employers are required to process and disburse employee salaries for the previous month no later than the 1st day of each Gregorian month. Payments must be made through the Wage Protection System (WPS) or other MOHRE-approved channels.

• 85% Compliance Threshold
  A company will be considered compliant if at least 85% of total wages are paid on time. Additionally, an employee is deemed to have received their salary if at least 85% of their entitled wage is paid, after accounting for legally permissible deductions.

• Escalating Penalties for Delays
  MOHRE has introduced a structured penalty system for delayed salary payments:

• Day 2: Automated notifications issued to the employer.

• Day 5: Suspension of new work permit issuance.

• Day 11: Administrative fines imposed and potential downgrading of company classification.

• Day 21 onwards: Further legal consequences, including labour complaints, increased scrutiny, and possible travel restrictions on responsible parties.

Exemptions from WPS Requirements

Certain categories are excluded from WPS compliance under Article (4) of the Resolution. These include:

• Employees involved in active labour disputes.

• Workers reported under absconding status.

• Employees on unpaid leave.

• Holders of mission work permits (not exceeding three months).

• Employees in banks, financial institutions, and places of worship.

• Additional categories as specified by MOHRE.

What This Means for Employers

This resolution reinforces the UAE government's commitment to protecting employee rights and ensuring transparency in wage payments. Businesses must review their payroll processes, ensure timely salary transfers, and maintain accurate WPS reporting to avoid operational disruptions and financial penalties.

We strongly advise all employers to take proactive measures to align with the new requirements before the enforcement date.

For full details, you may refer to the official MOHRE resolution

Should you require assistance with WPS compliance, payroll processing, or labour regulation advisory, our team is available to support you.