90 financial institutions process salaries for 99% of private-sector workers, with monthly wage transfers exceeding AED 37 billion

Dubai: The Ministry of Human Resources and Emiratisation (MoHRE) has confirmed that more than 90 financial institutions, including banks and exchange houses, provide services under the Wage Protection System (WPS), which processes salary transfers worth more than AED 37 billion every month.The ministry said the private sector recorded high levels of compliance with wage payments last month, with many companies choosing to pay salaries ahead of the Eid Al Adha holiday and before the usual payment date on the first day of the month. This, it said, reflects a strong culture of compliance and a stable labour market.MoHRE added that the actual implementation of the new Wage Protection System decision will begin on July 1, covering June salaries.Speaking during a media briefing held yesterday, the ministry explained that the new decision adopts a gradual approach that gives companies time to correct their status before regulatory measures are applied. The move is expected to reduce labour disputes and work stoppages while strengthening labour market stability and the UAE’s attractiveness to skilled professionals and talent.According to the ministry, more than 600,000 establishments operate under its supervision, while the Wage Protection System covers around 99 per cent of private-sector employees. It added that the overwhelming majority of businesses maintain high levels of compliance in paying wages on time.Key pillar of labour market stabilityKhalil Ibrahim Al Khoury, Undersecretary for Labour Market Operations and Emiratisation at MoHRE, said the Wage Protection System is one of the key pillars supporting labour market stability in the UAE.He said the system enhances transparency, protects workers’ rights and improves compliance across the business environment. It also ensures wages are paid on time and strengthens confidence in the workplace, helping prevent disruptions that could affect employment relationships or business continuity.Al Khoury said the latest decision forms part of the ministry’s ongoing efforts to develop the regulatory and procedural framework of the Wage Protection System, improving monitoring efficiency and governance while reinforcing stable labour relations.He stressed that the changes do not impose major new obligations on employers, but instead enhance procedures and governance mechanisms already associated with the system.Early intervention and risk-based approachAl Khoury said the decision standardises monitoring procedures related to wage payments, making obligations clearer and allowing faster responses to delayed salary payments.He explained that the ministry follows a risk-based and phased approach. The process begins with electronic monitoring of delayed payments, followed by notifications, alerts and direct communication with companies to give them an opportunity to rectify their status.Only after these steps would precautionary measures, such as suspending certain services, be considered, with further escalation applied only in cases of continued non-compliance.“This approach is designed to encourage preventive compliance and give companies sufficient time to address issues before penalties are imposed,” he said.He added that enforcement efforts are more focused on labour-intensive sectors with significant operational activity, such as construction and maintenance, where salary delays can have wider implications for labour relations and business continuity.85 salary transfer thresholdAl Khoury noted that a company is considered compliant if it transfers at least 85 per cent of the total wages due. This threshold provides flexibility to accommodate operational circumstances such as annual leave, sick leave and legally permitted deductions resulting from employee absences, while still protecting workers’ rights and financial stability.More than 60 million interactions with companiesThe undersecretary said MoHRE supervises over 600,000 companies and that the vast majority comply with wage payment requirements.He added that the ministry prioritises direct communication with employers before taking regulatory action. During 2025, MoHRE recorded more than 60 million interactions with businesses through text messages, emails and phone calls.Some compliance-monitoring measures, he said, are applied based on risk assessments, economic activity and workforce size, ensuring that attention is directed towards sectors most vulnerable to the impact of salary payment delays while maintaining the stability of critical industries.July 1 implementationThe ministry reiterated that the decision will take effect from July 1, 2026, for salaries due for June.It said the Wage Protection System aims to ensure wages are paid on time, strengthen trust in the workplace, reduce labour disputes and work stoppages, and support stable employment relationships and business continuity.MoHRE also highlighted that the Wage Protection System is one of the UAE’s largest financial programmes, handling monthly transfers exceeding AED 37 billion. This, it said, underscores the system’s central role in supporting labour market stability, strengthening business confidence and keeping pace with economic growth and expansion across sectors.