UAE Introduces Major Changes to the Wage Protection System: What Employers Need to Know

The UAE Ministry of Human Resources and Emiratisation (MOHRE) has issued Ministerial Resolution No. 0340 of 2026 Concerning the Wage Protection System (WPS), introducing significant changes to wage payment compliance requirements for private sector employers. The Resolution came into effect on 1 June 2026, replacing Ministerial Resolution No. 598 of 2022.

The new framework aims to strengthen wage protection mechanisms, establish a unified wage payment schedule across the private sector, and introduce a more structured enforcement regime against non-compliant employers.

A Unified Wage Payment Date

One of the most notable developments is the introduction of a single wage due date for all private sector establishments. Under the new Resolution, wages for the preceding month must be paid by the first day of each Gregorian month, and any payment made after that date will be considered delayed. Employers must continue processing salary payments through the WPS or any alternative payment systems approved by MOHRE.

New Compliance Thresholds

The Resolution introduces a practical compliance benchmark for employers. An establishment will generally be considered compliant if it transfers at least 85% of the total wages due to its workforce by the due date. Similarly, an employee will not be considered unpaid where they have received at least 85% of their entitled wage, provided that any difference results from lawful deductions or withholdings permitted under UAE labour legislation.

While these thresholds assist in determining WPS compliance, they do not affect an employee's right to claim any outstanding amounts that remain due.

Escalating Consequences for Delayed Payments

The Resolution establishes a clear timeline of enforcement measures for employers who fail to pay wages on time.

MOHRE will begin monitoring non-compliant establishments immediately after the due date and will issue alerts from the second day following non-payment. By the fifth day, work permit issuance may be suspended. Continued non-compliance can result in administrative fines, reclassification of the establishment, suspension of additional work permits, automatic labour dispute registration, precautionary attachment procedures, travel bans on responsible persons, and referrals to the Public Prosecution in certain circumstances.

The severity of the measures increases depending on the duration of the delay, the number of affected employees, and whether the violation is repeated.

Expanded Exemptions

The Resolution also clarifies several categories of workers and entities that may be excluded from WPS requirements, including certain workers involved in wage-related court disputes, employees on approved unpaid leave, workers subject to valid absconding reports, specific foreign workers paid outside the UAE, seafarers, and workers holding mission permits of up to three months. Certain entities, including banks, financial institutions and places of worship, are also excluded.

Key Takeaways for Employers

Private sector employers should review their payroll processes immediately to ensure salaries are processed before the first day of each month and that supporting payment records are properly maintained. Businesses should also assess any operational risks associated with delayed payments, given the increasingly stringent enforcement measures and potential regulatory consequences.

The Resolution reflects the UAE's continued commitment to employee protection, labour market stability, and enhanced compliance standards. Employers that proactively review their payroll and HR compliance procedures will be best positioned to mitigate regulatory risks under the new WPS regime.

At Rasma Legal, we regularly advise employers and businesses on UAE employment law compliance, workforce management, internal policies, employment disputes, and regulatory obligations. If you have questions about the new WPS requirements or any other employment-related matter, our team is available to assist.