Everything You Need to Know About Wage Protection System (WPS) in the UAE

wage protection system

Expatriates from more than 200 nations live in the UAE, contributing to the country’s economic development and advancement. The Income Protection System (WPS) was established by the UAE government to make payments and wage distribution easier.

Expatriates from almost 200 nations live in the UAE, contributing to the country’s economic development and general advancement. The Compensation Protection System was established by the UAE government to make payments and wage distribution easier (WPS). Let’s figure out what the system is, how it operates, and everything else we need to know.

Let’s Introduce The Wage Protection System Or WPS In The UAE?

The WPS was created by the UAE Central Bank and the Minister of Human Resources and Emiratisation and was released in 2009. (MOHRE).

The Wage Protection System (WPS) in the United Arab Emirates is an electronic salary transfer system that allows private-sector employers to pay their employees’ wages through banks, bureau de change, and other regulated financial institutions.

The MOHRE provides a secure database for private sector enterprises to create wage files for their employees. Companies will have to upload these files to their respective banks in order to distribute wages to their employees. MOHRE uses these files to ensure that all employees’ dues are paid according to their contracts, and they contain critical information regarding the employee’s earnings.

Objectives Of The WPS

The WPS in the UAE ensures that wages are paid on time as agreed between the employer and the employee. The large WPS database includes all MOHRE-registered institutions from a variety of businesses and industries. In addition to its many functions, it performs the following:

  • Employee pay will be protected.
  • Offering a faultless system that protects employers’ rights and saves time and effort of disbursing wages and salaries.
  • Ensure job security in the private sector of the UAE.
  • Strengthen working connections while ensuring that all stakeholders’ rights are protected.
  • Ensure a simple and transparent wage distribution method.
  • The use of proactive measures to make sure the safety of different personnel and decrease labour and salary issues.

Wage Protection System – Payment Process

Following the steps below, once the account has been successfully registered, the next step is to complete the payment.

Step 1: 

The employer is required to open a bank account in the UAE if he does not own an account. However, the bank or the agent must be an authorized one.

Step 2 

The employer is required to sign a WPS agreement with the bank or agent to proceed further.

Step 3 

A bank or agent transmits information about an employee’s salary and pay transfer to the UAE Central Bank via electronic means, which then notifies the WPS (Workforce Payment System). 

Step 4

The UAE Central Bank sends all details to MOHRE for cross-checking.

Step 5 

Employers receive an authorization from WPS to pay their employees’ earnings directly to their bank accounts.

Step 6

After the employee is paid, the bank transfers the salary to that employee’s bank account. Employees of WPS can check the status of their salary transfers by using the app.

Salary Withdrawal Using WPS

The many options to withdraw your salary from WPS in the UAE are listed below.

By Using The WPS Card

Employees without a relevant bank account in the UAE can withdraw their pay using a WPS card. Furthermore, WPS-registered businesses can easily partner with a UAE money exchange, providing a cost-effective WPS-compliant payroll solution. These financial exchanges provide employees with services such as salary disbursement and financial transfers. Additionally, the WPS card can be used at multiple venues throughout the emirates and is issued by the exchanges.

Using an ATM Machine

The salary can be withdrawn by employees who have a relative’s bank account in the UAE and an ATM card; the process is simple. In the event that you have a personal account with the bank, the bank will notify you of the salary transfer. The notification may occur via SMS or email.

Conclusion 

The Wages Protection System (“WPS”) has been in place across the GCC (with the exception of Bahrain) for some years and has proven to be a helpful tool for codifying, regulating, and ensuring timely payment of employee salaries, as well as a reliable means of monitoring employer non-compliance.