Compliance Advisory: Key Changes in the UAE Wage Protection System

Overview of the WPS Update and Its Statutory Significance

On 10 December 2025, the Ministry of Human Resources and Emiratisation (MoHRE) launched an upgraded Wage Protection System (WPS). This enhanced version was developed in collaboration with the Central Bank of the UAE, Al Etihad Payments, and several MoHRE‑accredited financial institutions to strengthen wage payment transparency and compliance. The updated WPS allows employers to manage wage payments digitally and benefit from direct, real‑time data integration with regulators and payment platforms. (MOHRE)

This update is part of the UAE Government’s digital transformation agenda, designed to make compliance easier for employers while maintaining robust worker protection mechanisms. (Khaleej Times)

Statutory Requirements and Compliance Principles

WPS as a Legal Obligation

Under UAE labour law, employers must pay their employees’ salaries through WPS using approved banks, financial institutions, or exchange houses. Wages are transferred in line with the employment contract’s terms and timing. The system applies to over 99% of private‑sector workers and forms a statutory mechanism for salary compliance monitoring. (Khaleej Times)

Purpose of the WPS

The statutory framework for the WPS is designed to:

• Ensure timely and accurate wage payments to employees;
• Provide transparent reporting of salary transfers to MoHRE;
• Facilitate data integration for compliance monitoring and labour planning;
• Support labour market stability and fairness between employers and employees. (Khaleej Times)

Exemptions and Special Cases

Certain categories of employees and scenarios are exempt from WPS requirements under Ministerial Resolution No. 598 of 2022. These include:

• Employees with ongoing wage‑related legal cases;
• Employees reported as absconding;
• New employees within the first 30 days of their wage due date;
• Employees on documented unpaid leave;
• Specific offshore or foreign payroll arrangements. (MOHRE)

Employers should check whether any exemption criteria apply before assuming exclusion from WPS compliance.

Implications for Employers Hiring Remote Talent in the UAE

Contractual and Payroll Obligations

For foreign companies hiring remote talent who are UAE‑based, salary payments should align with the WPS processes if the employment relationship is legally governed within the UAE. This means:

• Registering the company and its UAE‑based employees with MoHRE;
• Processing wage payments through the updated WPS via approved financial platforms;
• Ensuring salary payment frequency and contractual terms match what is reported in the system.

Understanding these obligations up front helps avoid administrative discrepancies and supports seamless compliance with UAE employment law.

Digital Integration Advantages

The updated WPS accelerates:

• Registration and verification of employer and employee data;
• Real‑time wage tracking that enhances transparency for both parties;
• Communication efficiency between employers, banks, and regulators through integrated digital channels. (MOHRE)

These capabilities reduce manual steps and support statutory adherence while giving employers clearer oversight of payroll flows.

Regulatory Compliance and Employer Risk

WPS is monitored continuously by MoHRE, and late or incorrect wage reporting can trigger enforcement actions, such as work‑permit holds or administrative notifications. (Gulf News)

Employers should maintain accurate payroll records and timely submissions to avoid statutory issues. Engaging legal counsel or an EOR service ensures that compliance responsibilities are understood and clearly executed.

How Tarmack Supports Your Compliance Journey

As your Employer of Record partner, Tarmack ensures:

• Statutory registration and ongoing reporting for all UAE‑based employees through WPS.
• Payroll integration with MoHRE‑approved digital platforms.
• Adherence to contractual salary terms aligned with UAE employment law.
• Monitoring of any changes in WPS obligations and legislative updates.

Partnering with a specialist EOR like Tarmack helps foreign employers focus on strategic growth while meeting statutory payroll and compliance requirements.

Statutory Advisory Summary

This WPS update represents a significant statutory development in UAE employment compliance. Employers hiring remote or UAE‑based talent should treat WPS compliance as a core legal obligation and adjust payroll practices accordingly. With enhanced digital capabilities now in place, employers have greater transparency, streamlined operations, and access to real‑time reporting — all aligned with the UAE’s regulatory framework. (Khaleej Times)c