In 2009, the United Arab Emirates (UAE) developed an electronic salary transfer mechanism called WPS—Wage Protection System. It was introduced by the Ministry of Human Resources and Emiratisation (MOHRE) in collaboration with the Central Bank of the UAE. The main aim of WPS protection is to eliminate disputes related to payments and build transparency between employers and employees.
With every passing year, WPS audits become more rigorous, reflecting the nation’s dedication to ensuring timely and full payment of wages to employees in the private sector. In this article, we will cover everything related to WPS audits, compliance, and its role in the UAE.
How Does Wage Protection System WPS Work in the UAE
First WPS, a needs to be registered in MOHRE and hold a bank account with a WPS-authorised financial institution in the UAE. After this, employers must submit employee salary information files (SIFs) in detail, including employee names, wages, bank account numbers, and payment dates.
Employers in the UAE must deposit employees’ salaries into their designated bank accounts or through other approved payment channels. The WPS UAE processes the added transactions and ensures salaries align with MOHRE’s records. The salary details should be in a specific format for secure salary payments.
Under WPS, financial institutions in UAE act as intermediaries, enabling smooth and timely wage payments. They also ensure employees get paid according to the agreed-upon terms. Moreover, these institutions keep detailed records of individual salary transfers, which employers and MOHRE can access anytime to verify compliance.
WPS audits aim to:
- Ensure employees receive their rightful wages in a timely manner.
- Detect and deter fraudulent practices, such as falsified wage records.
- Maintain the UAE’s reputation as a hub for fair labour practices.
In 2024 alone, MOHRE conducted 688,000 inspections, uncovering 29,000 labour law violations, including non-compliance with WPS salary regulations.
How WPS audits are done?
Here is the complete process of WPS audits in the UAE:
- Data collection and analysis: First, MOHRE collects salary information files (SIFs) submitted by employers and cross-verifies every piece of information in them. Cross-verification is done against your employment contracts and other official records available in your company to ensure consistency and accuracy.
- Monitor wage payments timeline: Next, MOHRE will check whether you have processed your payments within 15 days. According to WPS regulations, it is the employer’s responsibility to ensure that employees receive their salaries by the 15th of every month. If there is a delay in processing wage payments, you may be subject to penalties or suspension of work permits.
- On-site inspections: After warnings, if an employer has repeatedly violated WPS, then MOHRE may opt for an on-site inspection to assess compliance. The charges and punishment for non-compliance depend upon the degree of risk.
Wage Protection System WPS Compliance Requirements
In the UAE wage protection regulation is not only a system, but a government-enforced legal requirement that employers need to fulfil when running a business in Dubai and other Emirates.
- Mandatory salary processing through WPS: All private businesses that are registered under MOHRE must process accurate salary payments through the WPS system, ensuring no wage payment delays.
- Accurate salary payments via approved financial institutions: Employee salaries must be disbursed via banks, exchange houses, or financial institutions that are approved by the UAE Central Bank and MOHRE.
- Timely wage transfer: Employers should pay accurate salaries to their employees within the said time frame; any delays or inaccuracy can lead to heavy penalties.
- Accurate and properly maintained Salary Information File (SIF): You need to submit the Salary Information File (SIF)in the correct format, ensuring compliance with UAE wage protection law.
- Proper wage record maintenance for audits: As an employer, you must maintain detailed wage records that are audit-ready at all times. MOHRE’s inspection teams may request access to:
- Copies of employment contracts
- Payroll reports and bank statements
- WPS submission receipts
- Employee attendance records and other related documents.
Legal Requirements And Employer Obligations
In the UAE, the WPS regulation mandates that all employers (with some exceptions) must be registered with MOHRE and should transfer wages of employees through the WPS electronic salary transfer system. This requirement applies to all private sector entities on the mainland and increasingly to companies operating in major free zones.
In addition, you need to stay updated on the latest amendments in local labour law and WPS regulations.
Penalties for Non-Compliance with the Wage Protection System (WPS)
Below are the key penalties and steps to address errors for employers who fail to comply with the wage protection system in the UAE:
Consequences of delayed salary transfer
As of 2025, if your company fails to pay salaries on time in the UAE, then you may face the following consequences with a delay of:
- Day 3: You will get an automated reminder from MOHRE.
- Day 10: A second reminder from MOHRE will be issued.
- Day 15: Your salary delay for the month is officially recorded.
- Day 17:
- Beyond Day 30: Your company may get blacklisted and face inspections. Also, the case with penalties will be referred to the Public Prosecution for legal action.
Fines for wrong salary transfer
If you, as an employer, intentionally provide incorrect salary details or delay employee payments, you may be fined up to AED 5,000 per affected worker.
Suspension of the business license
If your company is found non-compliant, you will be prohibited from registering new businesses until you resolve all wage-related issues and meet WPS requirements.
Who Needs to Comply with Wage Protection System?
All private sector companies registered with the MOHRE must comply with WPS wage regulations. This means all local UAE businesses, branches of foreign companies, SMEs, and established corporations must obey the system for employee wages.
However, there are the following exceptions:
Businesses in special activities (fishing boats, public taxi vehicles, banks, and houses of worship) that Emiratis own do not fall under the wage regulations.
In addition, companies operating within free zones that don’t fall under MOHRE’s jurisdiction don’t have to comply with WPS UAE. This, however, is changing with time. For instance , or JAFZA, has mandated WPS compliance for its companies.
As for employees, the following are the categories that don’t comply with the WPS salary law:
- Employees with an ongoing wage-related lawsuit.
- Workers who are officially reported as absent under a ‘work abandonment’ report.
- New hires within their first 30 days from the salary due date.
- Employees on unpaid leave (submitted supporting documents to MOHRE).
Process Payroll Accurately with Wage Protection System Experts
WPS is designed to build a transparent, ethical, and sustainable salary payment system that protects both employees and employers. Staying compliant with this labour law not only prevents you from penalties but also builds people’s trust in your business.
But, with the growing complexity of WPS regulations, you may not have enough time or resources to stay compliant with it all the time. This is why many businesses are turning to specialised payroll partners to manage WPS requirements efficiently and accurately. For professional assistance, you can contact Connect Group, who offer the bes
Whether you’re a small enterprise or a large organisation, our expert team ensures that employee salaries are calculated, documented, and disbursed on time through MOHRE-approved institutions. We help you streamline compliance, reduce administrative burden, and allow you time to focus on core business operations. Contact us now!
