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140,000 UAE Businesses Not Compliant With Wages Protection System

UAE : 10 March 2011

Those businesses that have been banned cannot transact with the Ministry of Labour and the length of the ban is proportionate to the number of faults.

Over 140,000 UAE firms are now under the banned or ‘Bloc List’ after not adopting the provisions of the WPS (or Wages Protection System) according to Labour Ministry figures.

A source from the ministry also pointed out that those firms under the ban are still obligated to pay employee salaries while listed, based on reports by print media Al Ittihad.

Many small businesses across the nation are still issuing payroll in cash form, even though the WPS directs businesses to use bank transfers for wage payments.

The Labour Ministry noted that those firms not adopting the WPS will not be able to undertake standard transactions with the ministry, including the issuance of work permits, the renewal of employee labour cards and the approvals of new business operations.

The ministry is also issuing bans to those businesses that do not issue salaries on the pay date.

Companies are under the ban for a period determined by the number of faults recorded. One mistake causes a one-month ban on ministry transactions (stretching past the point of correction). The second mistake will result in a two-month ban – again commencing once the company has corrected the mistake. Three-month bans will be issued to those with three mistakes.

If a business is in arrears for employee wages beyond a two month consecutive time period the details will be forwarded to the Attorney General and legal action will follow.

Paul Holdsworth, Staff Writer, Gulf Jobs Market News
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