WPS: What you need to know

The Wages Protection Scheme, or WPS, is a mandatory method for processing payroll in the UAE for ‘onshore’ companies (in Dubai, that is a business which holds a Department of Economic Development or DED trade licence), and also for certain freezones, such as the Jebel Ali Free Zone (JAFZA).

Initially it was proposed as a system to protect the wages of lower-paid workers, who had little to no recourse in claiming back unpaid wages from an employer.

Employee information, including labour card number, fixed and variable salary and bank details are entered into an excel spreadsheet, with the file then being converted to a text document or ‘SIF’ file for upload via internet banking. This information is then transferred to the Ministry of Labour (MOL) via the individual company’s MOL code.

Although the process is straightforward, it can prove a bit fiddly ensuring the formatting is done correctly as even a comma in the wrong place will cause the file to be rejected from upload.

For companies wanting to outsource the hassle, bureau de changes such as UAE Exchange and Al Ansari are able to assist with your WPS worries, for a small fee each month. This will involve some data entry from the client side onto a pre-formatted excel worksheet which is then emailed to the exchange.

For employees who earn a monthly salary less than the amount required to open a bank account (normally around AED 4,000 a month), UAE Exchange offers a service whereby monies are uploaded directly onto a bank card – similar to a prepaid credit card, offering security for these staff who would be otherwise be denied proper banking facilities.

It is important to remember that variations to employee pay from month to month are not advised, and the fixed portion of their salary must stay consistent each month; although the ‘variable’ portion can fluctuate. Employers unlawfully deducting amounts from an employee could potentially be investigated by the MOL.

Non-compliance to the above will result in the organization being subject to fines and visa issue bans, until the WPS process is implemented, so remember to get your staff onto WPS as soon as their labour cards are issued!

Written by Marie-Claire Accordino, The Accounts Dept


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