Firms that fail to pay employees on time will be fined and eventually be stopped from trading under new measures being introduced from Monday, October 3.
Under the new wage protection decree, announced earlier this year by the Ministry of Human Resources and Emiratisation, a delay of 10 days or more after payday will trigger fines of Dhs5,000 for every employee not paid.
A series of penalties are also set out if staff are not paid in the days after that.
After 16 days, firms will be prevented from hiring new employees; after one month authorities will be brought in and the company and any subsidiaries can be prevented from trading.
Fines will also rise to Dhs50,000 per employee for cases that are not resolved within 60 days. The new decree will apply to every company employing more than 100 people.
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“If the company fails to pay wages for 60 days from the due date, then administrative fines shall follow, in addition to registered fines for failing to pay wages a month from the due date,” said Maher Al-Obed, Assistant Undersecretary for the Inspections Sector.
For companies employing fewer than 100 staff, the current regulations shall apply, which include work a ban on new work permits, fines and court referrals.
Barney Almazar, Director of Dubai-based Gulf Law, which works with the Philippines Embassy to help expats facing employment problems, said the new decree will help to keep employers in line. He also urged staff that are not paid on time to report their companies to the authorities.
He said: “This law sets out everything very clearly, with time frames, fines, an action plan and who to approach if you don’t receive your salary.
“Until now people had no idea what action they can take against their employers or which legal path to take. Now they have access to more information and can protect themselves.”