New deadlines for paying wages in the UAE: what’s changing for everyone

Since 1 June, private-sector companies in the United Arab Emirates have been required to meet a new, single deadline for paying their employees’ salaries. This revolution in payroll management sets the first day of each month as the absolute deadline, radically transforming established practices.

The Ministry of Human Resources and Emiratisation (MoHRE) launched this ambitious reform through Ministerial Resolution No. 340 of 2026. From now on, any payment made after that date will automatically be deemed to be overdue, triggering a series of progressive measures.

How does the new compliance calculation work?

The revision of the wage protection scheme sets out specific regulatory thresholds for assessing employers’ compliance. A company will be deemed compliant if it transfers at least 85% of the total amount of wages due to its employees before the deadline. This 85% rule protects workers whilst offering employers some technical flexibility.

This pragmatic approach recognises the operational realities of businesses whilst safeguarding employees’ fundamental rights. An employee will not be regarded as having been underpaid if they receive at least 85% of their outstanding wages, without thereby forfeiting their right to claim the remaining balance.

The system also takes into account the deductions permitted by law under Article 25 of Federal Decree-Law No. 33 of 2021 on the regulation of labour relations.

Six progressive stages of intervention

In response to late payments, the Ministry is implementing a six-stage enforcement mechanism, with each stage increasing the pressure on the defaulting employer.

Monitoring and early warnings

The first stage begins immediately on the due date, with continuous electronic monitoring until payment has been verified. From the second day onwards, the non-compliant organisation receives repeated notifications and reminders until the matter is resolved or the process moves on to the next stage.

Administrative restrictions

The Ministry may suspend the issue of new work permits for non-compliant establishments. This measure directly affects the company’s ability to expand, creating immediate economic pressure.

The employer receives a formal notice explaining the reasons for this suspension and offering them a final opportunity to rectify the situation before the sanctions are made more severe.

Official warnings and penalties

On the fifth day after the deadline, a formal payment notice is issued to the employer. This step marks the start of the critical phase of the enforcement process.

On the eleventh day, administrative fines as set out in Cabinet Resolution No. 21 of 2020 may be imposed. Repeat offenders risk being downgraded to category three under Resolution No. 209 of 2022 if the breach is repeated within six months.

Emergency procedures after sixteen days

Where wages remain unpaid by the sixteenth day, the MoHRE automatically initiates the registration of an individual or collective labour dispute on behalf of the employees concerned.

This automatic intervention applies to establishments employing 25 or more workers across all sectors, as well as jointly owned establishments where the combined number of workers who have not been paid reaches 25 or more in specific sectors: construction, transport and storage, security services, cleaning services, recruitment agencies and domestic worker recruitment agencies.

Stronger enforcement measures

The sixth stage comes into effect on the twenty-first day after the deadline. For businesses with fewer than 50 employees, an enforcement order may be issued to recover wages. Businesses with 50 or more employees face collective labour dispute proceedings.

The additional measures include the precautionary seizure of the institution’s assets, travel bans on its senior management, the referral of the case to the public prosecutor’s office, and the submission of all relevant documents for legal action.

Referral to the Crown Prosecution Service

Establishments employing 50 or more workers may be referred to the public prosecutor’s office in the event of repeated breaches relating to the payment of wages. This procedure also applies to jointly-owned establishments where the total number of workers owed wages reaches 50 or more in designated sectors.

Dismissal may also occur whenever the breach poses a risk to the stability of the labour market, regardless of the size of the establishment. This provision allows for a swift response to exceptional circumstances that threaten economic stability.

Eleven categories of specific exemptions

The new system excludes certain categories from the calculation of wage compliance. Employees who already have wage claims referred to the relevant courts or covered by an applicable enforceable instrument are exempt.

Workers reported as absent from work during the period covered by the absence report, those whose freedom has been restricted by a court order, and employees on approved unpaid leave are also exempt, subject to appropriate notification.

Seafarers working on board ships, foreign employees of foreign companies whose wages are paid outside the country, and holders of work permits valid for up to three months are other categories that are exempt.

Special exempt entities

Several types of establishment fall completely outside the system: fishing vessels owned by Emirati nationals, public taxis owned by nationals, banks and financial institutions, and places of worship.

These exemptions recognise the specific operational characteristics of certain sectors whilst maintaining the general scope of the protection system.

Technical payment arrangements

The salary protection system requires electronic transfers via banks, currency exchange bureaux and participating licensed financial institutions. Developed by the Central Bank of the United Arab Emirates, this system enables the MoHRE to maintain a comprehensive database of salary payments.

Salaries may be paid in UAE dirhams or in any other currency mutually agreed between the employer and the employee in accordance with the employment contract. This flexibility caters for international companies whilst respecting employees’ preferences.

The scope of the scheme now extends to compulsory application for certain categories of domestic workers, whilst its use remains optional for other occupations within this sector.