Effective June 1, 2026, new compliance rules for private sector employees will come into effect, including the following changes:
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- Wage payments due by 1st of the month. Employers will be required to process employee salary payments through the approved Wage Protection System (WPS) or other Ministry of Human Resources and Emiratisation (MOHRE)-approved payment systems, ensuring wages are paid by the first day of each calendar month for the preceding month’s wages; whereas currently such payment can occur by the 15th day of such month. Payments after this deadline are considered delayed.
- Increased wage transfer threshold. The wage transfer threshold will increase to 85%; up from the current 80%. As was the case previously, employees are deemed to be paid where this threshold of entitled wages has been received by the employee, provided any deductions comply with UAE labor regulations.
- New dispute resolution mechanism. The regulations will also introduce a new dispute resolution escalation framework for delayed salary payments.
As a result of the new rules, employers will need to accelerate payroll timelines to ensure salaries are processed and received by the first day of each month, reducing the previous payment window and requiring tighter coordination between human resources, finance and payroll providers. Additionally, companies may need to upgrade payroll systems, banking arrangements, and WPS integration processes to meet the stricter payment deadline and the increased wage transfer threshold.
This alert is for informational purposes only. If you have any questions, please contact the global immigration professional with whom you work at Fragomen.
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