The updated Wage Protection System removes the 15-day grace period for payments during which late payments were not immediately flagged
From June 1, if you are a private sector employee in the UAE, your company must pay your salary by the first day of each month under the new Wage Protection System rules (WPS). Salary paid after the first day will be considered delayed.
While salaries are due on the first day of the month, authorities begin taking action almost immediately in a phased manner, with warnings starting from Day 2 and penalties escalating if delays continue.
With the updated rules, the UAE introduces clearer controls for salary payment deadlines and stricter measures against non-compliant companies. Here’s a detailed explainer of the new Wage Protection System rules, including what has changed, how it affects companies and workers, and the penalties for delays.
What changed in the new Wage Protection System?
Under the previous rule (Resolution 598 of 2022), salary due dates were based on individual employment contracts, meaning wages could be paid at the end of the month or by mid-month. Employers were also given a 15-day grace period, during which late payments were not immediately flagged.
The new resolution (No. 340 of 2026) eliminates the 15-day grace period. It introduces a single, standardised salary deadline requiring firms to pay by the first day of each month. The update also tightens compliance rules. Salaries must be paid through the Wage Protection System (WPS) or other ministry-approved channels, and proof of payment and supporting documents must be submitted.
The rule also introduces a proportional compliance measurement that did not exist under the previous framework. The regulatory actions are also tighter in the new WPS system.
Will salary day for employees change?
For most employees, the salary day may not change much, especially if companies already paid wages at the end or start of the month. However, the strict requirement for employers has changed: salaries must be credited by the first day of each month. Companies that relied on the mid-month window or the earlier 15-day grace period must now adjust their payroll cycles to meet the new deadline. This ensures wages are paid on time and avoids being flagged for delays.
What is the 85% salary compliance threshold rule?
The new rule defines compliance at two levels. At the company level, an employer is considered compliant if it pays at least 85 per cent of the total wages due to all employees by the deadline. At the individual level, an employee is treated as having received their salary if they are paid 85 per cent or more of their entitled wage, provided any shortfall is due to legally permitted deductions.
However, this does not mean employers can underpay staff. Workers still have the full right to claim any unpaid balance, and the 85 per cent threshold is only a compliance measure used by authorities, not a limit on what employees are owed. It mainly gives companies a small buffer to manage legitimate payroll issues, not a justification for withholding salaries.
Faster regulatory actions in case of non-compliance
The new rules significantly speed up enforcement compared to the previous system, cutting the time it takes to take action against companies that delay salary payments. Earlier, meaningful penalties, such as work permit suspensions, were typically applied more than two weeks after the due date. Now, enforcement begins almost immediately.
Under the updated system, the Minister of Human Resources and Emiratisation (Mohre) will start monitoring companies from the first day. By Day 2, notifications and warnings are issued to employers who haven’t paid salaries. If salaries remain unpaid, stricter action follows quickly. By Day 5, companies can be blocked from obtaining new work permits, and they will receive formal notifications and warnings to settle outstanding wages.
Stricter escalation: From fines to travel bans
The updated system introduces a much tougher escalation path for companies that continue to delay salary payments beyond the initial stages.
By Day 11, employers face administrative fines and may be downgraded in classification, particularly for repeated violations within six months.
If the delay continues, the consequences become more serious. By Day 16, authorities can automatically register a labour dispute against the company. This is a key change from the past, when workers had to file complaints themselves. At this stage, companies with 25 or more unpaid workers in certain sectors may also face further restrictions, including continued suspension of work permits.
By Day 21, enforcement reaches its most severe stage. Authorities may start legal proceedings to recover unpaid wages, impose asset restrictions, and issue a travel ban on the person responsible for the company. In cases involving larger groups of workers, disputes may be escalated collectively and referred to the Public Prosecution.
With authorities now automatically stepping in and far more quickly to protect workers and recover unpaid wages, these changes mark a significant shift in UAE labour law.
Who is exempt from violations under WPS?
The updated rules clarify that certain cases will not count as WPS violations. This ensures employers are not penalised for situations beyond their control or already under legal review. Employees involved in court wage disputes, those reported for absconding, or workers detained or under judicial restrictions are excluded.
The exemption also applies to employees on unpaid leave and to specific groups, such as seafarers and some foreign workers, whose salaries may be processed outside the UAE. Workers on short-term permits (up to three months) and certain sectors, including banks, financial institutions, places of worship, and other specified activities, are also excluded from violation calculations.
