Implementation of the new Ministerial Decree 739/2016 concerning Wages Protection
Under the newly launched Wages Protection decree employees wages must now be fully paid within a period which should not exceed ten day from the payment date as registered in the Wages Protection System (“WPS”). According to the Minister for Human Resources SaqrGhobash the object of the decree is to ensure employees receive their salary on time and to protect the stability of the labour market.
For those companies that employ over 100 individuals the penalties that will be applied should payment of wages be delayed more than 10 days from the payment date will be as follows:
- A notice will be sent to the infringing company to advise it that if it fails to regularize its position the Ministry will stop granting any new work permits from the sixteenth day of the delay
- From the sixteenth day the Ministry will suspend the work of the infringing company and inform it that if it continues with the non payment commencing the following month the following will be set in motion:
- The courts will be informed of the position to start punitive action against the company in question
- Suspension of the company will be extended to all companies owned by the employer.
- A ban on registration of any new companies
- Encashment of the labour guarantee
If the company persists in its violation of late payment then a fine may be imposed after 60 days in addition to the above sanctions
For those companies that employ less than 100 members of staff the procedures currently adopted by the Ministry of Labour will apply unless the violation to pay has been repeated more than once within one year. In such circumstances the penalties described above will become applicable.
It should be further noted that the Ministry will not deal with any company that has not applied to register with the WPS as of the date of the Ministerial decision. This underlines the importance of all establishments in signing up to the WPS system as soon as possible to avoid the negative consequences of a suspension and bans for failure to comply.