An escrow system could ensure that workers – especially the lowest paid and most vulnerable – get their pay on time.
A lapse in wage protection for low-income staff
Ever since it was introduced in 2009, the UAE's Wage Protection System has helped companies and employees alike, ensuring that salaries are paid on schedule and correctly.
But news this month has revealed a problem just beyond the mandate of the system as it now operates: with no notice, the company Asia Exchange Center failed to disburse funds to employees of several small and mid-size companies in Dubai and Sharjah. The case suggests that the Wage Protection System may need to incorporate additional requirements to prevent any more such cases.
As The National has reported, the sums in question were not enormous; in the case of two companies whose officials talked to the paper, two workforces - 28 people at one company and about 300 at another - missed out on payroll averaging about Dh1,100 per person.
To their credit, those two firms found ways to pay their workers directly within a few days. But not all companies can do that, and none should have to. The employers, although blameless, have now paid out twice. If other companies have also been affected, there are almost certainly workforces that are disgruntled, to say the least.
For the employees, the relatively small amounts involved make the problem more serious, not less. People earning larger salaries may have the financial resources and contacts to cushion the blow of a missed monthly paycheque, but poorer people often do not. Worse, many of the workers are Muslims and this sudden unexpected shortfall in income occurred as Eid approached. Worse still, much of the payroll money in question was surely to have been remitted to families in other countries - children, spouses and parents who may be needy even with the money and destitute without it.
Asia Exchange is blaming a computer problem, and has assured firms that the money will be repaid. But after more than two weeks, concern is growing.
Like all firms operating payroll services under the Wage Protection System, Asia Exchange has been authorised to conduct transactions by the Ministry of Labour. Regardless of the cause of the problem in this particular case, authorities must now consider going one step further, requiring payroll-services and exchange firms to put into escrow a fund to cover an average month's payroll.
Those funds could flow out to employees on short notice when there's a problem with the middleman. Paying labourers their wages on time is, after all, a question of ethics, a matter of justice and in the interests of everyone concerned.