UAE’s New Salary Rule: Fines, Work Permit Suspensions and Travel Bans for Delayed Pay Explained

The UAE has introduced stricter salary payment regulations for private sector employers under the updated Wage Protection System (WPS), requiring companies to pay employee salaries by the first day of each month starting June 1, 2026.

The new framework, introduced under Resolution No. 340 of 2026, removes the previous 15-day grace period and establishes a unified salary payment deadline. Authorities say the changes are designed to strengthen worker protection, improve payroll compliance, and ensure faster intervention when wages are delayed.

New Salary Deadline Under WPS

Under the revised rules, private sector employers must ensure salaries are credited by the first day of each month through the Wage Protection System or other approved payment channels.

Previously, salary due dates were determined by individual employment contracts, and employers benefited from a 15-day grace period before violations were formally recorded. The updated regulation abolishes that grace period, meaning salary delays are now tracked immediately after the due date.

Companies are also required to maintain proof of payment and submit supporting documentation when requested by authorities.

Will Employees Notice Any Change?

For many employees, payday may remain largely unchanged, particularly if their employers already processed salaries at the end or beginning of each month.

However, businesses that previously relied on the grace period or paid salaries later in the month will need to adjust their payroll systems to comply with the new deadline.

The change aims to provide greater certainty and timely wage payments for workers across the UAE.

Understanding the 85% Compliance Threshold

A key feature of the updated framework is the introduction of an 85% compliance threshold.

At the company level, an employer is considered compliant if at least 85% of total wages due to all employees are paid on time.

At the individual level, an employee is regarded as having received their salary if at least 85% of the entitled wage has been paid, provided any deductions are legally permitted.

Authorities clarified that the threshold is solely a regulatory compliance measure and does not reduce an employee’s right to claim the full salary owed.

Faster Enforcement Measures

The revised WPS introduces significantly faster enforcement compared to previous regulations.

Day 2: Initial Warning

Employers who fail to pay salaries by the deadline begin receiving notifications and warnings from authorities.

Day 5: Work Permit Restrictions

Companies that continue delaying payments may face suspension of new work permit applications and receive further compliance notices.

Day 11: Administrative Penalties

Persistent non-compliance can result in administrative fines and possible downgrading of the company’s classification status, particularly for repeat violations within six months.

Automatic Labour Disputes and Legal Action

One of the most significant changes comes on Day 16.

If salaries remain unpaid, authorities can automatically register a labour dispute against the employer without requiring affected employees to submit complaints themselves.

Companies with 25 or more unpaid workers in specific sectors may also face additional restrictions, including ongoing work permit suspensions.

Travel Bans and Asset Restrictions

The strongest enforcement measures are triggered by Day 21.

At this stage, authorities may:

• Initiate legal proceedings to recover unpaid wages
• Impose restrictions on company assets
• Issue travel bans against the person responsible for the company
• Refer larger cases involving multiple workers to the Public Prosecution

The new escalation process represents one of the UAE’s most stringent approaches to wage protection, ensuring faster government intervention in cases of delayed salary payments.

Who Is Exempt From WPS Violations?

The updated regulations also identify categories that will not be counted as WPS violations.

Exemptions include:

• Employees involved in active wage disputes before courts
• Workers reported as absconding
• Employees under detention or judicial restrictions
• Workers on unpaid leave
• Certain seafarers and foreign workers paid outside the UAE
• Employees on permits valid for three months or less
• Workers in specific exempt sectors, including banks, financial institutions, and places of worship

These exemptions are intended to prevent employers from being penalised for circumstances outside their direct control.

Stronger Worker Protection Framework

Labour experts view the revised Wage Protection System as a significant step toward enhancing employee rights and improving payroll discipline across the private sector.

By removing the grace period, introducing automatic dispute registration, and accelerating penalties ranging from fines to travel bans, the UAE has strengthened its commitment to ensuring workers receive salaries on time while increasing accountability for non-compliant employers.