UAE Introduces New Wage Protection System Resolution Effective 1 June 2026

The UAE Ministry of Human Resources and Emiratization (MOHRE) issued Ministerial Resolution No. 340 of 2026 concerning the Wage Protection System (Resolution), introducing a revised framework for wage payment compliance in the private sector. The Resolution will come into force on 1 June 2026 and repeals Ministerial Resolution No. 598 of 2022. The Resolution significantly restructures the timing, compliance thresholds, and enforcement mechanisms applicable to wage payments and reflects MOHRE’s continued focus on salary protection.

APPLICABILITY OF THE RESOLUTION

The Resolution will directly apply to all private sector companies licensed with the MOHRE. It remains to be seen whether free zones that implemented the Wages Protection System (WPS), such as the Dubai Multi Commodities Centre or the Jebel Ali Free Zone, will amend their rules regarding salary transfers.

UNIFIED WAGE DUE DATE

One of the most notable changes is the introduction of a unified wage due date across the private sector. Wages for the preceding Gregorian month must be paid on the first day of each Gregorian month. Any payment made after this date will be considered delayed. The previous WPS regulations provided more flexibility for employers and required companies to pay wages on their due date and provided greater leniency for non-compliance.

Although not explicitly stated within the Resolution, we understand that early payment (for example, payment of salary at the end of the month before it is due on the first day of the following month) will be recognized as compliant within the system. Employers most impacted by the Resolution—and who will need to change their payroll practices—will be those paying monthly in arrears on or around the middle of the month.

The Resolution also requires employers to maintain and submit supporting documentation evidencing payment of wages in accordance with MOHRE requirements.

INTRODUCTION OF AN 85% COMPLIANCE THRESHOLD

The Resolution introduces a new compliance threshold for WPS purposes. An establishment will be deemed compliant where it transfers at least 85% of the total wages due to workers by the due date. This is a change from the previous threshold of 80%.

Similarly, a worker will be treated as paid (and thus the employer compliant) if they receive at least 85% of their wages, provided any shortfall results from lawful deductions or withholdings in accordance with the UAE Labour Law. The previous resolution only required employers to pay at least 80% of an employee’s wage through the WPS to consider the employee as paid.

This development is important: while the UAE Labour Law allows for deductions of up to 20% of an employee’s salary in certain circumstances (for example, for loan repayments) and also stipulates that up to 50% can be deducted if there are multiple reasons for deduction as set out in the UAE Labour Law, the Resolution will practically restrict deductions to a maximum of 15% of an employee’s monthly wage for WPS compliance.

ESCALATING ENFORCEMENT MEASURES FOR DELAYED WAGE PAYMENTS

The Resolution sets out a detailed escalation framework for delayed wage payments. The enforcement process begins immediately from the due date with electronic monitoring of compliance.  Thereafter, enforcement escalates progressively:

• Electronic monitoring to ensure compliance will commence immediately on the first day of the month where salary has not yet been paid.
• From the second day after the due date, MOHRE may issue notifications and warnings to non-compliant establishments.
• On the fifth day following the due date, MOHRE may suspend the issuance of new work permits.
• On the 11th day, repeated violations within six months may trigger administrative fines and reclassification into the Third Category under MOHRE’s establishment classification regime.
• On the 16th day, MOHRE may automatically register labour disputes and suspend work permits for non-compliant employers who employ 25 or more employees or group companies who collectively employ at least 25 employees in specific sectors (for example, construction, security services and cleaning services).
• On the 21st day, more severe measures may apply in certain cases, including precautionary attachment procedures, travel bans against responsible individuals and referrals to the Public Prosecutor.

The Resolution specifically targets sectors perceived as higher risk from a wage protection perspective, including construction, transport and storage, security services, cleaning services, recruitment agencies, and domestic worker recruitment offices.

EXEMPTIONS FROM THE WPS

The resolution sets out several categories of employees and establishments excluded from the WPS requirements. The list has been extended as compared with the previous resolution governing the WPS.

New categories of exempt employees include the following:

• Foreign employees employed by foreign establishments or their branches in the UAE, who receive their wages outside of the UAE, subject to a request submitted by the establishment to the Ministry, and with the approval of those employees
• Employees whose liberty is restricted in implementation of an order or judgment issued by a competent authority, throughout the period of such restriction during which work cannot be performed
• Employees holding a mission work permit for a duration not exceeding three months

The Resolution has removed the exemption for new employees during the first 30 days from the wage payment due date. This means that new employees immediately fall within the scope of the WPS.

DELEGATION OF WAGE PAYMENTS

The Resolution expressly permits employers to delegate payroll processing to third parties, provided the MOHRE is supplied with the delegate’s details and the scope of delegation. However, the employer remains ultimately responsible for timely wage payment and compliance with the Resolution.

PRACTICAL CONSIDERATIONS FOR EMPLOYERS

The new Resolution is likely to require employers to review payroll operations, internal controls, and payment timelines ahead of the 1 June 2026 implementation date.

Employers should consider the following:

• Reviewing payroll cycles to ensure salary payments are processed on or before the first day of each month
• Ensuring that salary payments for new employees can be arranged as soon as possible upon commencement of their employment
• Ensuring lawful deduction practices are clearly documented and adjust deduction thresholds based on the new 85% compliance cap
• Reviewing outsourcing and payroll delegation arrangements
• Assessing exposure to the enhanced enforcement measures and operational consequences associated with delayed payments.