The UAE labor market draws thousands of expatriates each year, who move to the Emirates seeking a high standard of living, enhanced career prospects, and the advantage of tax-free earnings. This migration bolsters the country's diverse labor force, propelling its economy and establishing the UAE as a nexus for global talent and innovation. To cultivate a flexible and equitable workplace, the UAE's Regulation of Labour Relations Law permits employers and employees to mutually consent to various salary payment methods. This law safeguards the rights of both parties while adapting to diverse work arrangements, which are contingent on the nature of the contract between the employer and employee, provided it is legally recognized by the Ministry of Human Resources and Emiratisation (MoHRE). The following are the six acknowledged wage payment methods in the UAE labor market: Monthly wage, Weekly wage, Daily wage, Hourly wages, Commission-based wage, and Piece-rate wage. When it comes to salary payment, wages are due on the first day of the month following the period outlined in the employment contract. If no period is specified, payment must occur at least monthly. Employers are in arrears if wages are not paid within the first 15 days after the due date, unless a shorter period is agreed upon in the contract. The UAE government's Wage Protection System (WPS) aims to facilitate the secure and timely payment of wages by employers. All employers registered with MoHRE must utilize the WPS for wage disbursement, adhering to the due dates. Salaries are transferred to employees' accounts in banks or financial institutions authorized by the Central Bank of the UAE. MoHRE will not process transactions for companies not registered with the WPS until they comply. Payment can be in Emirati dirham or another currency if agreed upon in the employment contract. The government has also imposed penalties on companies for late wage payments. Although the UAE Labour Law does not specify a minimum salary, it broadly states that salaries should meet the basic needs of employees.
Text: Lara Palmer
11.06.2024
Exploring the UAE's diverse workforce and the regulation of salary payment methods