x Abu Dhabi, UAEFriday 28 July 2017

50,000 firms not in wages scheme

The deadline to join pay protection system passed a year ago.

ABU DHABI // Nearly 50,000 companies have still not signed up to a payroll system designed to guarantee employees' wages, almost a year after the deadline.

Of the 250,000 firms registered at the Ministry of Labour, 202,994 have joined the Wages Protection System (WPS), launched in September 2009 to ensure all employees receive their salaries on time, in full, through a bank.

More than 50,000 companies have signed up in the past year. Now the ministry is pursuing the remaining employers through the courts.

Muhsin Alnasi, director of the programme, said officials were visiting the companies to find out why they had not signed up.

When the programme started, many companies said they had only a couple of employees so it made sense to pay them in person rather than through a bank. Mr Alnasi said such factors were being taken into account.

"Some, after inspections, were given exemptions after we made sure that the few workers the sponsor had were being paid on time," he said. "The majority of these sponsors have up to three workers, and with such a small number many prefer to pay them by hand."

When the system was launched, businesses were given up to six months to sign up, with big companies having to register first. Some said they had to give their workers special training to use ATMs, as many were unable to read English or Arabic.

Now, companies that have still not joined are being fined, as are those that fail to pay staff. After 15 days of not paying any employee, the company moves from the work permit "green" zone to "orange" - meaning that it is under observation.

At that point, the ministry contacts the owner to find out why payment is late. Officials also make visits.

If the owner exceeds 60 days without paying workers, the case is sent to the labour court and the owner is subject to a Dh10,000 fine for each unpaid worker, up to Dh5 million. The owner is barred from leaving the country and the company is prevented from hiring new staff.

"Umm Shreif", an Emirati company owner, complained this year to the undersecretary of the ministry that she had been stopped by immigration officials at Dubai International Airport because she had not paid her staff for two months.

"They were on holiday, so how can I pay them?" she said. She was told she should have paid them in advance.

In another case, a company owner absconded, leaving 850 workers stuck in Al Ain. The ministry waived the usual restrictions on switching jobs and helped 90 per cent of them to find new employment, and the others had their airfares paid to leave the country.

"Without the WPS, then we would have not known about this case, and wouldn't have been able to help the workers," a ministry spokesperson said.