The UAE Ministry of Human Resources and Emiratisation has brought a new wage protection rule into force, requiring all private sector establishments registered with the ministry to pay employees their previous month’s salaries by the first of each calendar month. The requirement took effect on 1 June 2026 under Ministerial Decree No. 340 of 2026.
Under the decree, wages must be transferred through the Wage Protection System or other ministry-approved channels, and employers must retain documentation confirming that payments have been made. An establishment is considered compliant if it disburses at least 85% of total wages due by the deadline.
Penalties escalate on a fixed timeline. From day two after the due date, the ministry begins sending automated alerts to employers. By day five, the ministry suspends the issuance of new work permits and notifies employers to resolve the breach. From day eleven, administrative fines apply and repeat offenders within a six-month window are reclassified to a lower compliance tier. Establishments have a regulatory grace period of up to ten days before financial penalties begin.
If the delay extends to day sixteen, labour disputes are filed on behalf of affected workers and work permit issuances are frozen, with specific attention given to establishments employing 25 or more workers and those operating in construction, transport, storage, security, cleaning, recruitment, and domestic labour agencies.
Beyond 21 days, the ministry refers establishments employing 50 or more workers to the public prosecution if the violation is repeated. Additional enforcement tools include enforcement bonds to recover unpaid wages, precautionary asset attachment orders, travel bans on responsible parties, and referrals to other competent authorities.
The decree also sets out a list of exemptions. Workers with active labour cases before the courts, those registered as having abandoned their employment, and those on unpaid leave are excluded from the wage protection calculation. Foreign workers paid outside the UAE by foreign establishments, workers on temporary permits of three months or less, fishing boats, taxis owned by UAE nationals, banks, and places of worship are similarly exempt.
Establishments that wish to delegate wage payment to a third party may do so, but must notify the ministry of the delegated entity’s details and scope of authority. Legal responsibility for timely payment remains with the establishment regardless of any such arrangement.
