On 12 May 2026, the Ministry of Human Resources and Emiratisation (MOHRE) of the United Arab Emirates published Ministerial Decision No. 340 of 2026 “On the Wages Protection System”, changing the rules for wage payments and tightening oversight on employers. The Decision comes into force on 1 June 2026. The previously effective Ministerial Decision No. 598 of 2022 will cease to be in effect.
- From 1 June 2026, a single deadline for wage payments is introduced in the UAE — the 1st day of the month.
- The previous 15-day grace period is abolished, and any payment made after the 1st of the month is considered delayed.
- An employer is deemed to have fulfilled their obligations if they have transferred at least 85% of the total payment amount on time. The employee remains entitled to all sums due to them.
- The system of enforcement measures for non-compliant employers has been updated. It includes blocking work permits, penalties, and the automatic registration of labour disputes.
- For larger employers, asset seizure and travel ban for responsible individuals may be applied.
Wage Payment Deadlines in the UAE
Under the new rules, the unified date for paying employee wages in UAE private sector companies will be the first day of each calendar month (for the preceding calendar month). Any payment made after this date will be considered a salary delay.
The specified date is established as a single and universal deadline, without any extensions (previously, a 15-day grace period was provided before a payment was officially recognised as delayed). Employers will not be able to set alternative wage payment dates in employment contracts.
As previously, all employer establishments registered with MOHRE must pay their employees’ wages using the UAE Wage Protection System (WPS) or other systems approved by the Ministry. The WPS is mandatory for mainland companies; however, it has also been integrated by some free zones, such as DMCC or JAFZA. Other free zones apply their own wage payment monitoring systems. Financial free zones (DIFC, ADGM) fall outside the scope of MOHRE requirements and regulate labour relations independently.
All establishments are required to provide documents and data confirming the payment of wages to their employees in accordance with the procedure approved by the Ministry.
Employer Compliance Threshold
An employer’s obligation to transfer wages through the WPS is deemed fulfilled if they have transferred no less than 85% of the total wages due to their workers by the prescribed deadline (the 1st day of the month) — an increase from the previous threshold of 80%.
Furthermore, an employee is considered to have received their wage if they receive at least 85% of the amount they are entitled to, provided that the difference results from fixed withholdings or deductions made in accordance with applicable legislation. Permissible cases for such deductions are enumerated in Article 25 of Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations.
This specified threshold is intended precisely for evaluating employer compliance with wage regulations and does not imply any limitation on payments to employees. Where necessary, it provides companies with a degree of flexibility regarding the timing of wage transfers, but it does not grant the right to regularly underpay staff. As previously, the employee retains the right to demand the payment of all sums due to them.
Enforcement Measures for Delayed Wages
The Decision provides for a sequence of measures applied to employers who fail to pay wages on time. Compared to the previously effective regulations, the response times of the competent UAE authorities have been significantly shortened. The updated six-stage system of enforcement measures against non-compliant employers is structured as follows:
| Day of delay | Measure |
|---|---|
|
Day 1 |
Electronic monitoring of the establishment is initiated and continues until confirmation of payment is received. |
|
Day 2 |
Notifications are dispatched to the non-compliant establishment. |
|
Day 5 |
The issuance of new work permits for the establishment is suspended, resulting in an operational freeze on hiring. The owner of the establishment is notified of the reasons for the suspension, and a formal warning to disburse wages is issued. |
|
Day 11 |
An administrative penalty is imposed in the amount specified by Cabinet Decision No. 21 of 2020. In the event of a repeated violation within 6 months, the non-compliant establishment is reclassified into the “Third Category”. This is the lowest rating tier for UAE companies committing serious violations of labour legislation (criteria are established in MOHRE Ministerial Resolution No. 209 of 2022). |
|
Day 16 |
An individual or collective labour dispute is automatically registered. Additionally, for establishments in certain sectors (construction, transport, storage, etc.) with more than 25 unpaid employees, the issuance of work permits is also suspended. |
|
Day 21 |
For establishments with fewer than 50 employees — a writ of execution for the payment of wages is issued. For establishments with 50 or more employees, a collective labour dispute is registered, alongside the following measures:
|
The newly introduced measures include the automatic registration of labour disputes (whereas previously, affected employees had to manually file a complaint) and a travel ban from the UAE for the person responsible for wage payments.
Delegation of Wage Payments
The new Decision explicitly permits an employer in the UAE to delegate (outsource) the wage payment function to a third-party payroll provider at their discretion. In doing so, the employer must submit the provider’s details, along with copies of the issued power of attorney or the contract, to the MOHRE. These documents must clearly define the scope of the third party’s authority, obligations, and liability to the establishment.
Notwithstanding this delegation, the employer remains fully liable for paying wages within the prescribed deadlines in all circumstances. Should the third-party provider fail to comply with the payment deadlines, all enforcement measures (see above) will be applied directly to the employer.
WPS Exceptions
Article 4 of the Decision specifies the categories exempted from the obligation to process payments through the WPS, which include:
- Employees on unpaid leave;
- Employees performing short-term tasks (up to 3 months);
- Employees of foreign company branches who receive their salaries outside the UAE;
- Seafarers (crews of marine vessels);
- Banks and financial institutions (which are subject to separate regulations);
- Places of worship (religious institutions) and certain others.
What Should Be Done Before 1 June?
In-scope employers (all UAE mainland companies, as well as companies in free zones that operate with the WPS) must review their payroll processing timelines and, if necessary, adjust their calculation and WPS submission schedules. This is crucial to ensure timely disbursement under the new rules — no later than the 1st day of the month following the one being paid. The application of these new rules to UAE free zone companies depends entirely on whether the specific free zone has integrated MOHRE regulations.
Tags: UAE
