New wages payment system from September
All institutions registered under the Labour Ministry will, from
September this year, start making payment of their workers' salaries
through the newly introduced Wages Protection System (WPS).
Labour
Minister Saqr Ghobash has issued a decree enforcing the new system,
which involves transfer of salaries through selected financial
institutions, authorised and regulated by the government.
The
move, which implements cabinet decree No 133/1, is aimed at boosting
transparency and stability in the labour market. It also seeks to
protect the rights of workers in the country.
The minister and
the UAE Central Bank Governor, Sultan bin Nasser Al Suwaidi, recently
launched the WPS, which is based on latest technologies. Under the new
system, the employer can choose any registered agent to participate in
the WPS.
On receiving details about workers' wages, the bank
or institution, will send this information electronically to WPS. The
WPS will send the salary file to the agent for payment, and the agent
will then pay the employees. The system will also feed the Labour
Ministry with the necessary data base and information of all salary and
wage payments in the private sector to enable the ministry have
credible information about salaries in the sector.
Ghobash said the system will revolutionise the regional labour market.
"The
WPS reflects the UAE's pioneering position in the region, and will
increasingly project the country as a model worth emulating in the area
of boosting the rights of workers. It is our ethical and legal
responsibility to always strive to come up with innovative means of
implementing our leadership's policies, which aim at providing a secure
and stable environment and to protect the rights of all segments of
society," he said.
A dedicated WPS office in the ministry will
ensure that the process is functioning smoothly. The workers will not
be subjected to any deductions or charges to get their salaries.
The
decree gives deadlines for the various categories of business
institutions in the country to fully comply with the new system.
According
to the decree, institutions with 100 or more employees have three
months to comply fully with the new system with the deadline slated for
the end of November. Institutions with 15 to 99 employees have six
months to complete the process, with the deadline for this category set
at the end of February 2010. Those with 15 or less employees have their
deadline set for May 31, 2010.
Humaid bin Deemas, Acting
Director-General at the Labour Ministry, said the WPS is aimed at
entrenching transparency and competitiveness in the labour market and
cited a number of positive aspects of the system, including saving of
money, time and energy, boosting production and employee loyalty. He
described the new system as "most appropriate", saying it will save
both the employees and their employers the trouble of having to keep
huge amounts of money at their work places, which was a risky practice.
He
said even before the issuance of the new ministerial decree, the
response to the WPS was very positive, as the system transferred the
wages of about 28,000 workers in June.
Regarding penalties,
the decree states that institutions, which provided false information
about the wages of their employees, will suffer consequences, including
court action, in addition to denial of new work permits. Any
institution failing to transfer salaries of its employee to the WPS on
time will also have its work permit transactions blocked until all
transactions are cleared, he said.
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