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Tue 5 Jun 2007 01:55 AM

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Salary transfers to be made compulsory

Private companies will pay all salaries by bank transfer from January next year.

Private companies will be made to pay the salaries of all legal workers by bank transfer from January next year, Gulf News reports today.

Dr Ali Abdullah Al Ka’abi, minister of labour said a cabinet decision had been reached to ensure that workers would be paid regularly and on time. “The ministry will inform all private companies that, with effect from January 1, the salaries and wages of their staff must be paid through banks” he told the newspaper.

According to the minister, the move is intended to stop employers withholding or failing to pay wages to workers on low-incomes, particularly in the construction sector.

The move has been broadly welcomed, however some concerns have been voiced that workers will face bank fees and transport costs to reach outlets to withdraw salaries.

A number of banks said compulsory salary transfers were a positive move but would have huge cost implications as many low-income workers send their incomes to home countries without maintaining any balance.