DMCC Introduces Mandatory WPS Requirement From 15th February 2023
March 31, 2023 / Haroon Juma / HR & Payroll Blogs
The Dubai Multi Commodities Centre (DMCC) has newly implemented the Wage Protection System – better known as the WPS, effective from 15th February 2023. All companies based under the DMCC freezone must complete the registration for all employees with a valid Employment Visa or PIC – Personal Identity Card.
WPS is a payment system introduced by MOHRE – Ministry of Human Resources and Emiratisation to protect workers’ wages and prevent labour exploitation. The WPS is mandatory for all employers in the private sector and failure to comply with the system may result in penalties and fines.
Complying with the WPS requirement
All private sector employees in the UAE, regardless of nationality, need to be paid through the WPS. Before it became a mandatory requirement for DMCC, payment through the WPS was only required for mainland companies.
How does the WPS work?
Under the WPS, employees are ideally required to open a bank account and employers deposit their salaries through a registered WPS provider. The WPS Provider then transfers the funds through the WPS into the employee’s bank account, ensuring that the workers receive their wages on time. Employers are also required to provide a wage or salary statement that details the employee’s basic salary, allowances, and deductions.
What are the benefits of the WPS?
The WPS has several benefits for both employers and employees. For employers, the system ensures compliance with labour laws and prevents legal disputes related to wage payments. The system also eliminates the need for cash payments, reducing the risk of fraud and theft. For employees, the WPS ensures timely and secure payment of wages, providing financial stability and reducing the risk of exploitation.
What are the consequences of non-compliance with the WPS?
Failure to pay through the WPS can result in penalties and fines for employers. The MOHRE may issue a warning, impose a fine or put a block on the visa system if companies fail to comply with this mandatory requirement. Repeated non-compliance may result in the suspension of the companies activities, revocation of their license, or blacklisting.
How can employers register for the WPS?
Employers can register for the WPS through their banks or financial institutions. The bank will verify the company & owner’s identity and register them for the system.
Employers are required to provide the employee’s bank account details and wage information during the registration process.
How can employees check their wages under the WPS?
Employees can check their salaries under the WPS through their bank account or the MOHRE’s online portal. The wage statement provided by the employer should also detail the employee’s basic salary, allowances, and deductions.
How can employees report non-payment of wages under the WPS?
Employees who have not received their wages under the WPS can file a complaint with the MOHRE. The MOHRE will investigate the matter and take necessary action against the employer if they are found to be in violation of the WPS.
How has the WPS impacted the UAE labour market?
The WPS has had a significant impact on the UAE labour market, promoting transparency and accountability in wage payments. The system has reduced the number of wage-related disputes and strengthened the UAE’s reputation as a destination for investment and business.
How we can help
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