Wage Protection System

The UAE Wage Protection System (WPS) is an electronic mechanism for salary transfers, enabling private sector organizations to pay their employees through approved banks, exchange bureaus, and financial institutions recognized by the UAE Central Bank.

 

Introduced in 2009 by the UAE Central Bank to align with the Ministry of Labour's objectives, the UAE WPS aims to ensure timely and complete payment of wages. Initially focused on safeguarding blue-collar workers' rights, it now encompasses all private sector salaries under the jurisdiction of

Currently, Jebel Ali Free Zone (JAFZA) stands as the sole free zone fully implementing WPS. Dubai Multi Commodities Center (DMCC) commenced WPS implementation in February 2023, mandating all entities registered under it to process employee salaries through WPS starting January 2024. Government entities and public sector institutions are exempt from WPS compliance.

Employers submit employee salary and account details to WPS using the SIF file format

The involved parties in the WPS cycle include:

  • Employers: Companies registered in UAE Mainland and JAFZA.
  • Employees: Individuals working in the private sector holding a Ministry of Labour-issued labor card.
  • Banks: Financial institutions where employers hold accounts used for wage transfers to appointed agents.
  • Agents: Banks, exchange bureaus, or financial institutions approved by the UAE Central Bank to transfer wages to employees through WPS.

Under the model established by the UAE Central Bank, employer information is transmitted through WPS to one or more contracted agents for wage payments to employees. The funds from employers are secured by the CBUAE before transmitting information to the agents.

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