UAE to clamp down on firms that delay employee pay
UAE to clamp down on Firms that delay employee pay
The UAE has updated its Wage Protection System rules in an attempt to protect workers from unscrupulous companies that fail to pay salaries on time.
The Ministry of Human Resources and Emiratisation (MOHRE) said it “will monitor companies through field visits and inspections” to make sure firms are sticking to the regulations.
It said it will issue penalties against companies based on factors including their size, how long the salaries are delayed and the number of employees not being paid on time.
Companies not complying will receive a warning, and if they continue to fail to follow the rules the ministry will stop issuing new work permits until the salary disputes have been settled.
“The issuance of the Ministerial Resolution is part of the ministry’s efforts towards developing the legislative structure regulating the UAE labour market, which leads global competitiveness reports due to its efficiency, flexibility, and achieving an attractive environment for employers and for talented workers,” MoHRE’s acting under-secretary for human resources affairs Khalil Al Khoori explained.
Legal action will be carried out by local and federal authorities against non-complying firms.
An administrative fine will be imposed if the violation is repeated within six months, and the establishment will also be demoted to Tier three (3) under MoHRE’s establishment’s classification system.
Sailors working on board ships and those employed in foreign establishments or their branches operating in the country are exempt from the Wage Protection System.
UAE banks ‘can withstand global shocks’
The Central Bank of the UAE (CBUAE) has issued its Financial Stability Report for 2021, according to the WAM news agency, assessing “potential vulnerabilities” among the banks through solvency and liquidity tests.
The report outlines the various measures taken by the central bank to support the national economy during the Covid-19 pandemic in order to safeguard the stability of the financial system.
It also includes the central bank’s exit strategy from the Targeted Economic Support Scheme (TESS) as the UAE economy recovered, with the first phase completed by the end of 2021.
The second phase ended by June 2022, and the central bank will maintain the third and final phase of TESS measures during the second half of 2022, WAM reported.
The central bank also conducted risk analysis through solvency and liquidity tests and supervision to “assess potential vulnerabilities”, the statement said. The tests found that UAE banking systems had adequate capital and liquidity to withstand severe economic shocks.
“The Financial Stability Report records the CBUAE’s approach to identifying and mitigating potential systemic risks and safeguarding the stability and resilience of the UAE financial sector. The report projects a positive outlook for the country’s economy and financial system in 2022,” CBUAE’s governor Khaled Mohamed Balama said.
Balama warned that the global financial outlook could be affected by supply chain disruptions, rising inflationary pressures and further escalating geopolitical tensions, notably the war in Ukraine. He added that the central bank will continue to monitor “evolving global vulnerabilities and take necessary steps, if needed”.
The UAE central bank’s payment systems were “robust” during 2021, due to the increasing digitalisation of financial services and improved cyber security.
The Financial Stability Report for 2021 also highlighted the response by the UAE government to the Covid-19 pandemic, saying it contributed to the rebound in overall economic activity in the country – although it also said there could be risks involved as well.
“Risks for the banking system, which stem from the potential deterioration of assets quality and insufficient change in banks’ business models in light of the global digital transformation, climate change and the rising governance requirements,” it said.
UAE central bank measures are supported by the resilience and recovery of the nation’s banking system and the broader financial system to pre-pandemic levels, the statement added.
