Important Updates to UAE Wage Protection System Regulations

The United Arab Emirates (UAE) Ministry of Human Resources and Emiratisation (MOHRE) has announced updates to the Wage Protection System (WPS) regulations under Ministerial Resolution No. 340 of 2026. These revisions, effective from 1 June 2026, aim to strengthen wage protection measures and ensure compliance in the private sector.

Key highlights:

• Mandatory salary payment date: From 1 June 2026, private sector employers must disburse current month salaries before the beginning of the next month.
• Compliance requirements:
  • Employers are compliant if at least 85% of total wages are paid by the due date.
  • Employees are considered paid if they receive at least 85% of their due salary, with any shortfall due to documented deductions.
• Enforcement timeline:
  • Day 5: Potential suspension of new work permits and issuance of violation notices.
  • Day 11: Administrative fines for repeated infractions within a six-month timeframe.
  • Day 16: Recording of labour disputes and further sanctions, particularly affecting large companies.
  • Day 21: Stricter actions, including asset seizures and travel bans.
• Exempted groups:
  • Workers involved in active disputes or reported as absent.
  • Workers on documented unpaid leave, as notified to MOHRE.
  • Workers on short-term permits under three months.

Next steps for employers:

1. Review and adjust payroll cycles: Align payroll processes with the new regulations.
2. WPS integration: Ensure your systems are integrated with financial institutions for compliance.
3. Outsource assessment: Re-evaluate existing payroll outsourcing arrangements.
4. Team preparation and training: Inform HR and Finance departments about the changes.
5. Compliance planning: Implement necessary adjustments by the 1 June 2026 deadline.

Deloitte’s view

Deloitte anticipates that these regulatory updates will bolster the UAE’s commitment to protecting employee rights and enhancing transparency in wage payments. For our clients, it is crucial to proactively update payroll systems and processes to meet the new requirements, minimizing risk of non-compliance. 

Deloitte is here to assist clients in navigating these changes, offering strategic advice to optimize compliance strategies and operational workflows.