The UAE has overhauled how private sector wages are paid and the clock is ticking. Starting 1st June 2026, all private sector companies registered with the Ministry of Human Resources and Emiratisation (MOHRE) must transfer employee salaries by the first day of every month, under a new ministerial resolution that tightens the country’s Wage Protection System (WPS) like never before.
Here’s a complete breakdown of what has changed, who it affects, and what happens to employers who do not comply.
What Has Changed Under Ministerial Resolution No. 340 of 2026
The headline shift is straightforward: salaries for the previous month are now officially due on the 1st of each Gregorian calendar month. Any payment made after that date is formally classified as delayed – no exceptions.
Critically, the new resolution eliminates the 15-day grace period that previously allowed companies to pay wages without penalty up to a fortnight after the contract-specified date. That buffer is gone. Under the updated Wage Protection System, the first day of the month is the hard deadline.
All wages must be transferred via the approved Wage Protection System (WPS) or another payment channel explicitly authorised by MOHRE. Employers are also required to submit documents and data confirming that salary transfers have been completed, in line with the ministry’s procedures.
The 85% Compliance Rule
One of the more nuanced additions to the framework is a proportional compliance threshold. A company will be considered compliant if it transfers at least 85% of the total wages owed to employees by the deadline. This accounts for situations where part of a salary may be legally deducted or withheld under UAE labour law.
Equally, an employee will not be considered unpaid if they receive at least 85% of their entitled salary, provided the remaining portion is the result of legally documented deductions. Importantly, this does not remove an employee’s right to claim any unpaid amounts.
Penalties for Late Payment: A Phased Escalation
MOHRE has outlined a structured, escalating penalty system for companies that miss the deadline:
- From Day 2: Electronic monitoring begins, and warning notices are issued to the employer.
- From Day 5: Restrictions may be placed on the company’s ability to issue work permits. Formal notices to settle unpaid wages can also be issued.
- From Day 11 onwards: For repeat violations within six months, authorities may impose administrative fines, downgrade the company to the third business classification category, and apply travel bans on the individual responsible for the business.
MOHRE retains the authority to intervene in any establishment if there are perceived risks to labour market stability in the UAE.
Who Is Exempt from the New WPS Rules?
The resolution carves out several categories of workers and entities from the WPS requirements:
- Workers whose wage disputes have already been referred to court, or where an executive order has been issued – exempt for the amount and period under litigation
- Employees reported as absconding, for the duration of the report
- Workers unable to work due to legal detention or court orders
- Employees on approved unpaid leave, provided MOHRE is notified with the required documentation
- Short-term work permits of less than three months
- Fishing boats, citizen-owned public taxis, banks, and places of worship
Third parties may be authorised to process salary payments on a company’s behalf, though the legal responsibility for timely wage transfers remains with the employer.
What Does This Mean in Practice?
For most employees whose companies already process salaries at the end or start of the month, day-to-day life may not change significantly. The real impact falls on employers who previously relied on mid-month payroll cycles or the former 15-day grace window. Those companies must now restructure their payroll operations to ensure funds clear by the 1st of each month.
For workers, the change offers stronger protections: a clearer, enforceable salary date, a formal escalation path if that date is missed, and legal standing to claim any shortfall even when the 85% threshold is met.
The UAE’s renewed emphasis on wage compliance reflects a broader push to strengthen labour market transparency, attract international talent, and position the country as a globally competitive place to work and do business.
This article is for informational purposes only and does not constitute legal or financial advice. For guidance specific to your situation, consult a qualified UAE labour law professional.