August 2026 ยท Labor & Employment ยท 13 min read ยท Ahmad Abdulla Ahli Advocates & Legal Consultants
The UAE has introduced a substantially revised framework governing the payment and monitoring of private-sector wages. On 12 May 2026, the Ministry of Human Resources and Emiratisation (MOHRE) issued Ministerial Resolution No. 340 of 2026 Concerning the Wage Protection System. The Resolution became effective on 1 June 2026 and expressly repealed Ministerial Resolution No. 598 of 2022, which had governed the previous WPS framework.
WPS is an electronic salary-payment system used to monitor whether employees receive their wages correctly and on time, facilitating wage transfers through approved banks and financial institutions and enabling MOHRE to monitor employer compliance. Resolution No. 340 of 2026 strengthens that monitoring function considerably by introducing defined compliance thresholds and a much faster enforcement timetable.
The Resolution directly applies to private-sector establishments registered with MOHRE. Article 1 requires all establishments registered with the Ministry to pay their workers through the MOHRE-approved Wage Protection System or another payment system adopted by the Ministry. Employers should not assume that every UAE free-zone company automatically falls directly within the Resolution โ certain free zones operate their own employment systems, though some have independently adopted UAE WPS. Jebel Ali Free Zone (JAFZA), for example, states that its registered businesses must comply with UAE WPS, adopted in 2012, and Dubai Multi Commodities Centre (DMCC) maintains its own WPS guidance for member companies. The correct analysis should be made free zone by free zone.
Article 1 provides that the first day of every Gregorian month is the unified due date for wages relating to the preceding Gregorian month. A payment made after that date is regarded as delayed for WPS purposes. For example, for work performed during June 2026, wages became due on 1 July 2026. Employers may pay earlier than the due date โ early payment is understood to be accepted by the system in practice, though employers should ensure early payments are correctly attributed to the relevant payroll period.
Under the previous 2022 regime, employers were generally considered late where payment had not been made within the first 15 days after the due date, and the establishment compliance threshold was 80%. Under Resolution No. 340, a payment made after the first day of the following month is already considered delayed, the threshold has risen to 85%, and no equivalent exclusion exists for new employees during their first 30 days.
Article 2 establishes two related tests. An establishment is regarded as compliant where, by the due date, it transfers at least 85% of the total wages due to its workers. A worker will not be treated as unpaid where the worker receives at least 85% of his or her entitled wage, provided the difference results from established lawful deductions, and the Resolution expressly preserves the worker's right to claim any amounts otherwise due.
Importantly, the 85% threshold is a WPS compliance test โ it is not a rule allowing employers generally to reduce salaries by 15%. An employer remains required to pay the employee's contractual and statutory wage, subject only to deductions permitted under UAE law. Article 25 of Federal Decree-Law No. 33 of 2021 permits deductions in specified circumstances, and where multiple grounds for deduction exist, aggregate deductions may in certain circumstances reach up to 50% of the worker's wage โ the new WPS Resolution does not repeal those provisions. An employer contemplating a deduction that would result in a transfer below 85% should review whether the deduction is legally authorised, how it will be reflected within WPS, and whether it could trigger a compliance flag.
One of the most consequential changes is the effective removal of the previous 15-day period before an employer was treated as late. Banking cut-off times, weekends, public holidays, payroll approvals and technical issues should now be dealt with before the statutory deadline, not after it.
These later-stage measures are not automatic penalties against every employer โ their application depends on the establishment's circumstances, the number of affected workers and recurrence of violations under the criteria set out in the Resolution.
Article 4 expands and reorganises the excluded worker categories, including workers with wage-related labour claims referred to court, workers subject to a valid absconding report, workers on approved unpaid leave, seafarers, certain foreign workers paid outside the UAE, and workers holding mission permits of no more than three months. Certain establishment categories are also excluded, including fishing boats and taxis owned by individual UAE citizens, banks and financial institutions, and places of worship. Notably, the previous 30-day new-employee exclusion does not appear in the 2026 framework โ employers should integrate new employees into payroll and WPS processes promptly.
Yes. Article 5 expressly permits delegation of wage payment to another person or service provider, provided MOHRE receives the required information and documentation. However, outsourcing does not transfer the employer's ultimate WPS responsibility โ if the payroll provider fails to pay workers on time, the establishment remains responsible under the Resolution.
For UAE businesses, WPS compliance is no longer simply an HR administrative exercise โ it is a business-continuity, employment-law and regulatory-compliance issue requiring coordination between HR, payroll, finance, management and legal teams. Our Labor & Employment team advises employers on WPS compliance, payroll structuring and MOHRE enforcement matters โ read more about our Labor & Employment Law practice.