The United Arab Emirates has once again raised the bar for labour rights and corporate accountability. Effective 1 June 2026, the country’s updated Wage Protection System (WPS), introduced under Cabinet Resolution No. 340 of 2026, replaces the more lenient framework that operated under Resolution 598 of 2022.

The new rules eliminate the 15-day grace period that employers previously enjoyed, impose a single standardised salary deadline, and dramatically accelerate enforcement, including fines, work permit suspensions, asset restrictions, and travel bans on company representatives.

At AWS Legal Group, our employment law specialists have prepared the following comprehensive guide to help businesses and employees navigate the new compliance landscape and protect their legal rights under UAE labour law.

What Has Changed Under the New Wage Protection System?

Previously, salary due dates in the UAE were tied to individual employment contracts, allowing employers significant flexibility, often paying wages at mid-month or month-end. Companies also benefited from a 15-day grace period during which delayed payments were not immediately flagged.

The new regulation removes that flexibility. Under Resolution No. 340 of 2026:

The salary deadline is now standardised: wages must be credited by the first day of every month.

The 15-day grace period has been abolished, meaning any payment delay is immediately recorded.

All salary payments must flow through the Wage Protection System or other channels approved by the Ministry of Human Resources and Emiratisation (MOHRE), with supporting documentation submitted as proof.

A new proportional compliance measurement has been introduced to assess employer adherence at both the company and individual level.

For most employees whose employers already pay at the start or end of the month, daily routines may not change much. For employers, however, payroll cycles, internal approvals, and bank transfer timelines must be reviewed urgently to ensure compliance.

The 85% Salary Compliance Threshold Explained

A central feature of the new WPS is the 85% compliance threshold, which operates on two levels:

At the company level, an employer is considered compliant if it pays at least 85% of the total wages due to all employees by the deadline. At the individual level, an employee is deemed to have received their salary if they are paid 85% or more of their entitled wage, provided any shortfall arises only from legally permitted deductions.

It is critical to understand that this threshold is not a licence to underpay staff. Employees retain the full legal right to claim any unpaid balance, and the 85% figure functions only as a regulatory compliance buffer to allow companies to manage legitimate payroll discrepancies. Any attempt to use this threshold to justify withholding wages will expose the employer to claims and regulatory action.

Day-by-Day Enforcement Timeline: From Warnings to Travel Bans

One of the most significant shifts in the new WPS is the speed of enforcement. Where penalties previously took more than two weeks to materialise, they now begin almost immediately.

Day 1: MOHRE begins active monitoring from the salary due date.

Day 2: Notifications and warnings are issued to employers who have not paid wages.

Day 5: Non-compliant companies can be blocked from issuing new work permits and receive formal warnings to settle outstanding salaries.

Day 11: Employers face administrative fines and may be downgraded in MOHRE classification, especially for repeated violations within a six-month period.

Day 16: Authorities may automatically register a labour dispute against the company, without requiring employees to file individual complaints. Companies with 25 or more unpaid workers in certain sectors face further restrictions, including continued work permit suspensions.

Day 21: Enforcement reaches its most severe stage. Authorities may initiate legal proceedings to recover unpaid wages, impose asset restrictions, and issue a travel ban on the person responsible for the company. Large-scale wage disputes may be escalated collectively and referred to the Public Prosecution.

This accelerated regulatory pathway represents one of the most decisive enforcement frameworks introduced in UAE labour law to date.

Who Is Exempt From WPS Violations?

The new rules also recognise that not every payment delay is the employer’s fault. Certain categories of employees and businesses are excluded from violation calculations. These include employees involved in active court wage disputes, workers reported for absconding, and individuals detained or subject to judicial restrictions. Employees on unpaid leave, seafarers, certain foreign workers whose salaries are processed outside the UAE, and workers on short-term permits of up to three months are likewise exempted. Specific sectors, including banks, financial institutions, and places of worship, are also outside the scope of the violation framework.

Understanding these carve-outs is essential, particularly for multinational employers, maritime operators, and financial institutions that operate across overlapping regulatory regimes.

Legal Implications for Employers in the UAE

For UAE-based businesses, the new WPS rules demand immediate operational and legal review. Companies should audit their payroll calendars, banking arrangements, and HR processes to ensure salaries are credited by the first of each month. Internal compliance teams must also confirm that all payments flow through approved channels and that documentation is properly maintained.

Repeat violations are no longer treated lightly. A downgrade in MOHRE classification can affect a company’s ability to sponsor visas, recruit talent, and operate competitively. Worse, the prospect of travel bans on owners, partners, or authorised signatories creates direct personal liability that goes far beyond corporate penalties.

What Employees Should Know About Their Rights

For employees, the updated WPS strengthens protection significantly. Workers are no longer required to initiate complaints to trigger enforcement, as the system now automatically registers labour disputes against non-compliant employers. Employees who have suffered salary delays, partial payments, or unlawful deductions should document the shortfall and seek legal advice promptly to preserve their right to recover unpaid wages, end-of-service benefits, and any related entitlements.

How AWS Legal Group Can Help

At AWS Legal Group, our UAE labour and employment law team advises both employers and employees on the full spectrum of issues arising under the new Wage Protection System.

We assist clients with payroll compliance audits, internal policy drafting, dispute resolution before MOHRE and the labour courts, defence against administrative penalties, and recovery of unpaid wages and end-of-service entitlements.

Our advocates also represent business owners facing travel bans, asset restrictions, and Public Prosecution referrals arising from alleged WPS violations.

Whether you are a corporate employer seeking to align your payroll systems with Resolution No. 340 of 2026, or an employee whose salary has been delayed or withheld, early legal advice is the most effective way to protect your position.

Contact AWS Legal Group today to schedule a confidential consultation with our UAE employment law specialists and ensure full compliance, or full enforcement, of your rights under the new Wage Protection System.