By Tom Arnold
Date announced for mandatory electronic transfer of labourers' wages.
All firms registered with the UAE Ministry of Labour will start making payment of workers’ wages through the newly introduced wages protection system (WPS) from September, the ministry has said.
The new system makes the electronic transfer of labourers’ wages from employer to employee mandatory following a decree issued by Labour Minister Saqr Ghobash.
Around 4.2 million staff employed by almost 270,000 companies across the UAE will be paid under the WPS. Government related entities (GREs) and companies registered with free zones are among those exempt from the new regulation as they are not registered under the ministry.
In addition to protecting the rights of workers in the country, the new system is aimed at boosting transparency and stability in the labour market, the ministry said in a statement.
The WPS involves the transfer of salaries through selected banks, authorised and regulated by the government.
The banks send information electronically to the government if a wage payment from an employer is received, with the payment itself sent to an agent - usually a bank - chosen by the employer, who will then pay the employee.
Firms with 100 and above employees had three months up until the end of November to comply with the regulation, with companies with 15 to 99 employees given six months to comply. Firms with 15 or less employees had a deadline of the end of May 2010.
Around 28,000 workers had already had their wages paid electronically through the system in June, the ministry said.
Firms which consistently failed to transfer payment through WPS on time would be denied the right to apply for new working permits for a period of up to three months.
How does the government propose to issue bank accounts for these labourers?
There is a very sophisticated system introduced by Central bank and Ministry of labor, in which few banks and payroll companies are authorized after being analyzed and tested by Central bank. i.e. C3 card is one of the company specialized in payroll. The company is providing not only the Mastercard payroll cards but also managing the remittances and payroll within the labor camps. This WPS will not only be a informational hub for MOL and central bank for assurance of salaries to workers but also will be facilitating employees specially to blue collars to use bank facilities, security, savings, remittances etc.