Global Partner. Integrated Solutions.
26 May 2026
Major updates in the Wage Protection System of the UAE
 
Effective from 1 June 2026, the UAE Ministry of Human Resources and Emiratisation (MoHRE) has issued Ministerial Resolution No. 340 of 2026, introducing sweeping reforms to the Wage Protection System (WPS) with a revised regulatory framework governing wage payment obligation. This resolution significantly tightens wage payment timelines, strengthens compliance monitoring, and escalates enforcement measures across the private sector, and the Ministerial Resolution No. 598 of 2022 will stand repealed.

Key highlights

Unified salary payment due date
  • All private sector employers must pay wages on the 1st day of each Gregorian month for the previous month.
  • The traditional 15-day grace period for salary disbursements is officially gone.
  • No grace period - any payment after this date is automatically considered delayed.
Mandatory Wage Protection System (WPS) Compliance
  • Salaries must be processed through the MoHRE-approved WPS or other authorized systems only.
  • Employers are required to maintain and submit adequate payroll records and documentation evidencing salary disbursements and WPS compliance.
Regulatory threshold for compliance
  • Employers will be considered compliant if ≥85% of total wages are paid to employees on time.
  • Employees will be considered as 'paid' if they receive at least 85% of their entitlement, provided any deductions are lawful.
  • Employees will retain the right to claim any outstanding amounts.
Accelerated enforcement of penalties for delayed wage payments
Enforcement of penalties will now be faster and stricter, with earlier intervention compared to previous regulations. Below is the strict escalation framework that will apply for delays in wage payments after the due date:

Timeline Action/Penalty imposed
From day 2 Automated electronic monitoring begins. Warning notices and alerts will be dispatched.
On day 5 Suspension of new work permits. Formal notification to settle outstanding wages.
On day 11 Imposition of administrative fines for repeated offenses within 6 months, and downgrading of the firm to the third (lowest) business category.
On day 16 Automatic registration of individual/collective labour disputes for affected workers, suspending the issuance of work permits for firms with 25+ workers in key sectors (e.g., construction, transport, security, cleaning, recruitment).
On day 21 Precautionary asset seizures, travel bans on responsible corporate officials and referrals of companies with 50+ workers and notifying the Public Prosecution for repeated violations.

 
Delegation of wage payment
  • Employers may outsource payroll processing to whomever they think is appropriate, but full legal responsibility remains with the employer.
  • Real-time monitoring of compliance using enhanced WPS infrastructure will be enabled.
Categories excluded
The resolution explicitly excludes the following specific categories from standard WPS calculations:
  • Workers with active labour claims that have been referred to a competent court or for which an executive instrument has been issued
  • A worker whose liberty is restricted in the implementation of an order to judgement issued by a competent authority.
  • Employees on unpaid leave during the period of approved leave or those restricted by court orders.
  • A worker against whom an absconding report has been filed throughout the validity period of such report.
  • Foreign workers employed by overseas branches who legally receive salaries outside the UAE.
  • Short-term mission permits (under 3 months), seafarers, citizen-owned fishing boats/taxis, banks, financial institutions and, places of worship.
Key takeaways for employers
  • Immediate payroll alignment required - To ensure salary disbursement happens strictly by the 1st of each month.
  • Upgrade systems - To align payroll processes with WPS 2.0 and approved channels.
  • Strengthen compliance controls - To maintain accurate payroll records and audit trails.
  • Monitor cash flow closely - To avoid escalation of penalties rapidly within 5 days
  • Train HR & finance teams - To ensure awareness of the 85% threshold and enforcement triggers.
  • Review outsourcing arrangements - As the liability remains with the employer regardless of third-party involvement.
Our Comments

Resolution No. 340 of 2026 marks a major shift in UAE labour compliance, eliminating payment flexibility and introducing real-time oversight with stringent enforcement. Employers must act proactively to avoid penalties, maintain operational continuity, and safeguard workforce trust. Businesses operating in labour-intensive sectors or employing significant workforce numbers may face heightened regulatory scrutiny under the revised framework, especially where repeated WPS breaches occur. From a broader regulatory perspective, this resolution aligns with the UAE's continued efforts to strengthen labour market transparency, reinforce employee welfare protections, and promote greater confidence and stability within the private sector employment landscape.
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