The Ministry of Human Resources and Emiratisation has introduced a new penalty for private sector companies that don’t pay salaries on time.
Employers must be pay only through the wages protection system. Failing to pay employees on time will result in shelling out more than double the insurance policy of an employee.
Upon recruiting a new employee, the employer has the option to either submit Dh3,000 as bank guarantee on behalf of the employee or insure them under the new insurance policy, which costs Dh120 for two years.
In case of a company’s bankruptcy or failure to pay benefits, the new policy will provide a maximum insurance coverage of Dh20,000 per employee against the following benefits in the workplace: unpaid entitlements, end of service benefits, vacation allowance, overtime allowance, unpaid wages, return air ticket and work injury.
