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New penalty for UAE companies that don’t pay salaries on time

 

DUBAI – The Ministry of Human Resources and Emiratisation (MOHRE) has introduced a new penalty for private sector companies that delay salary payments for employees.

Employers who fail to pay their workers on time will have to pay more than double the insurance policy of the employee as a penalty, according to MOHRE.

The ministry announced on Monday that it will be “raising the insurance cost from Dh120 to Dh250 for violating establishments with 30 days insurance coverage”.

It also reminded employers to pay their workers through the Wages Protection System.

The new directive is in line with welfare reforms carried out by the ministry. In 2018, the ministry announced a new insurance policy Taa-meen.

Under Taa-meen, companies recruiting new employees have the option to submit a Dh3,000 bank guarantee or insure them under the new insurance policy that costs Dh120 for two years.

In case of company’s bankruptcy or failure to pay the employees’ benefits, the new policy will provide a maximum insurance coverage of Dh20,000 per employee against unpaid entitlements, end of service benefits, vacation allowance, overtime allowance, unpaid wages, return air ticket and work injury after it is determined by a court ruling.

The new insurance policy covers financial entitlements of employees for 30 months, according to state news agency WAM. ICA/Expat Media


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