Beginning on July 1, more than 600,000 private-sector businesses in the United Arab Emirates will operate under an improved pay Protection System. The government’s goals are to increase pay compliance, boost labour market regulation, and strengthen the nation’s appeal to international talent. The Ministry of Human Resources and Emiratisation announced that the updated framework will take effect for June salaries disbursed from July onwards. This marks the official implementation of a decision aimed at enhancing oversight of wage payments while ensuring a gradual and balanced regulatory approach. During a media briefing, Khalil Ibrahim Al Khoury, Undersecretary of the Ministry of Human Resources and Emiratisation for Labour Market and Emiratisation Operations, emphasised that the Wage Protection System is a crucial pillar in maintaining labour market stability in the UAE.

He stated that the system not only fosters transparency and protects workers’ rights but also improves compliance throughout the business landscape by guaranteeing timely wage payments and bolstering confidence in the labour market. The ministry reported that the Wage Protection System now encompasses approximately 99 percent of private-sector workers, facilitating monthly wage transfers that surpass Dh37 billion via a network of over 90 banks and exchange houses. It was noted that compliance levels among employers remain high, with many companies opting to pay workers prior to the Eid Al Adha holiday and ahead of the typical payment schedule at the start of the month. The new decision unveils a structured monitoring framework that hinges on risk assessment and implements graduated enforcement measures. Authorities indicated that the strategy aims to provide companies ample opportunity to address overdue payments prior to the initiation of regulatory measures.

Under the system, cases of delayed wage payments will initially be pinpointed through electronic monitoring, subsequently leading to notifications and direct communication with employers. Preventive measures, including restrictions on certain services, may be implemented solely if non-compliance continues, with any further escalation occurring incrementally as needed. The ministry announced that the framework is designed to minimise labour disputes and work stoppages, all while ensuring the continuity of business operations. Al Khoury emphasised that the revised measures do not impose substantial new responsibilities on employers; rather, they improve governance, monitoring processes, and the effectiveness of follow-up mechanisms associated with wage payments. Particular attention will be focused on labour-intensive sectors like construction and maintenance, where delays in salary payments can significantly affect employment stability and operational continuity.

According to the ministry, an establishment will be deemed compliant if it transfers a minimum of 85 percent of the total wages owed. Officials indicated that the threshold offers flexibility for operational circumstances, including employee leave, illness, and legally permitted deductions, all while ensuring the protection of workers’ rights. The ministry also emphasised its significant interaction with employers, reporting over 60 million engagements with companies in 2025 via text messages, emails, and telephone calls. Dalal Saeed Al Shehhi, Assistant Undersecretary for Labour Market and Emiratisation, stated that the revised system aims to enhance governance while avoiding the imposition of additional substantive burdens on businesses. She added that the measures aim to enhance compliance while balancing the interests of workers and employers, all while supporting stability in the labour market.