|Introduction of Wage Protection System (WPS) by DMCC
|The Dubai Multi Commodities Centre (DMCC), one of the world’s leading free zones providing a dynamic business environment for companies, has implemented a new Wage Protection System (WPS) as part of its efforts to promote fair and ethical business practices, protect worker rights, and ensure timely payment of wages.
WPS is an electronic salary transfer system that allows companies registered in the United Arab Emirates (UAE) to pay employees’ wages via banks or exchanges that are approved and authorized to provide the service. This system, developed by the Central Bank of the UAE (CBUAE), allows the regulator to create a database that records wage payments in the private sector to ensure the timely and full payment of agreed-upon wages.
With effect from 15 February 2023, all DMCC registered companies (hereinafter referred to as employer or member companies) are required to register all their employees holding an active or expired employment visa or Personal Identity Card (PIC) for the WPS salary transfer with a bank or exchange house, whether the employee does or does not have a bank account. Thus, for all member companies, the payment of employee salary via WPS transfer is mandatory.
Shareholders holding member company-issued residence visas are not required to register for salary transfers.
Henceforth, DMCC registered companies (employers) are mandated to register any new employees for salary transfer in the following cases:
- Immediately after the issuance of the Company Employment Card (CEC)
- Immediately after the approval of the Personal Identity Card (PIC) application
However, no action is required as of now for member companies that do not have any employees.
It is important to note the following:
- The salaries are to be paid in AED (Arab Emirate Dirham)
- Charges imposed by banks or exchange houses are not to be deducted from the wages/salaries of the employees
- The employees should be registered with banks or exchange houses authorized by the CBUAE
As per DMCC guidelines, during 2023, no portal sanctions or fines are applicable. However, starting January 2024, if a DMCC-registered company fails to transfer their employees' due salaries as per the employment contract, the DMCC may implement portal sanctions and fines, which will be deducted from the company’s portal account.