The Wage Protection System (WPS) – Application Guidelines

The Wage Protection System (WPS) – Application Guidelines

The Wage Protection System (WPS) is a system developed by the Central Bank of the UAE to ensure that private sector employees are paid their wages in a timely and accurate manner. The DMCC Free Zone has implemented the WPS to create a database that records wage payments in the private sector. This helps to guarantee that employers pay their employees the agreed-upon wages, as recorded in the system.

As a DMCC Free Zone company, it is mandatory to register all employees holding an active or expired employment visa or Personal Identity Card (PIC) for salary transfer with a bank or exchange house, regardless of whether they have a bank account or not. This requirement applies to both banked and unbanked employees. The aim of this requirement is to ensure that all employees receive their wages on time and that employers are held accountable for paying their employees the agreed-upon wages.

Shareholders are not required to register for salary transfer, but they can claim unpaid dues from the company through the Workplace Mediation process with DMCC Disputes Centre. In this case, they can request a No Objection Certificate (NOC) to register a court case against the company.

Employers are also required to register new employees for salary transfer immediately after the Company Employment Card (CEC) is issued or the Personal Identity Card (PIC) application is closed. This requirement ensures that new employees receive their wages on time and that employers comply with the WPS regulations.

It is important to note that salaries can only be paid in the national currency of the United Arab Emirates (AED). This means that all employers must ensure that their employees’ salaries are paid in AED, regardless of the currency in which they may be paid by their clients or customers.

Banks or exchange houses may charge employers for processing the salary transfer request through the WPS. However, these charges cannot be deducted from the employees’ wages or salaries. Employers can negotiate and mutually agree on charges with the service provider directly.

In conclusion, the WPS system implemented by the Central Bank of the UAE in collaboration with the DMCC Free Zone is aimed at protecting the rights of employees by ensuring that they receive their wages on time and that employers pay the agreed-upon wages. As a DMCC Free Zone company, it is mandatory to register all employees for salary transfer and comply with the WPS regulations. Failure to comply may result in penalties or legal action.

Summary of article by DMCC

Read the full article : HERE