The UAE continues to reinforce its commitment to a fair and transparent labour market through the issuance of Ministerial Resolution No. 340 of 2026 on the Wage Protection System (WPS).
The Wage Protection System is widely regarded as one of the UAE’s key mechanisms for safeguarding employees’ rights and regulating the contractual relationship between employers and employees in relation to the payment of the salaries.
Defined Timelines for Wage Payments
The resolution introduces a more structured timeline for the payment of wages, establishing the first day of each calendar month as the unified due date for wages relating to the preceding month. Any delay beyond this date is treated as a clear breach of the applicable requirements. Thus, entities must settle the employees’ salaries via WPS on such date to ensure compliance.
Compliance Standards under the Wage Protection System
The resolution establishes a compliance threshold under the Wage Protection System (WPS), whereby an employer is considered compliant if at least 85% of the total wages due to employees are paid on time. An employee is deemed to have received their wages where not less than 85% of the amount due has been paid, provided that any shortfall arises solely from lawful and established deductions or permitted withholdings in accordance with applicable legislation notwithstanding the employee’s right to claim any outstanding amounts pursuant to applicable laws.
Enforcement Measures and penalties for Delayed Wage Payments
The resolution introduces a comprehensive framework of escalating enforcement measures aimed at ensuring strict compliance with timely wage payment obligations, subject to the conditions, thresholds, and criteria prescribed by the Resolution.
| Timing from Due Date | Measure Taken |
| Day 2 | Issuance of notices and warnings to the non-compliant establishment |
| Day 5 | Suspension of new work permits for the establishment with notice to the employer for payment |
| Day 11 | Imposition of administrative fines and reclassification of the establishment into the third category in cases of repeated violations within six months |
| Day 16 | Automatic registration of individual or collective labour disputes, as applicable, and suspension of work permit issuance for targeted establishments, including those under common ownership with the non-compliant entity, where applicable |
| Day 21 | Escalated enforcement measures, including precautionary attachment orders, issuance of enforcement instruments, imposition of travel bans on responsible persons, and referral to the Public Prosecution |
Exemptions from the Scope of the Resolution
The resolution provides for clearly defined exemptions from its application, including, among others, employees with ongoing wage-related disputes before UAE courts, to the extent of the wage or period subject to the claim, employees who are on approved unpaid leave, and employees reported as absent from work, as well as those who are detained pursuant to a judicial order or judgment.
It also excludes certain categories of employees, such as seafarers, employees of banks and financial institutions, places of worship, and employees of foreign entities operating in the UAE who receive their wages outside the State, in each case subject to the conditions prescribed by the Ministry.
Employer Responsibility and Delegation
The resolution permits employers to delegate the process of wage payment to third parties, subject to providing the Ministry with the relevant details of the appointed party. Notwithstanding such delegation, the resolution makes it clear that ultimate responsibility for the timely payment of wages remains with the employer, reinforcing accountability and preventing any circumvention of legal obligations.
The Takeaway
The resolution shall enter into force on 1 June 2026, replacing Ministerial Resolution No. 598 of 2022 on the Wage Protection System. It introduces a more structured approach to wage protection, bringing together clearly defined payment timelines, measurable compliance thresholds, and a reinforced enforcement framework.
Seek Legal Counsel
IF you have further queries related to WPS regulations or would like to discuss any other employment queries, please feel free to reach out to our Senior Associate, Bassem Ehab and Associate, Salwa Baageel at Habib Al Mulla and Partners.
Disclaimer
The content provided in this article is intended for informational purposes only and does not constitute legal advice. While every effort has been made to ensure the accuracy and completeness of this information, the article does not offer a guarantee or warranty regarding its content. The matters discussed in this article are subject to interpretation, and legal outcomes may vary based on specific facts and circumstances. We recommend that readers seek individual legal counsel before making any decisions based on the information provided. If you require specific legal advice, please contact us directly.