September 1, 2023Dated: | ByMarketing Marketing | Corporate Tax | DMCC Wage Protection System (WPS) The DMCC (Dubai Multi Commodities Centre) has implemented the Wage Protection System (WPS) as part of its efforts to promote fair and ethical business practices, protect worker rights, and ensure timely payment of wages. The WPS is an electronic salary transfer system that allows companies registered in the United Arab Emirates (UAE) to pay employees’ wages via approved banks or exchanges. Here are some key points about the DMCC Wage Protection System: Purpose The WPS aims to ensure the timely and full payment of agreed-upon wages in the private sector. Electronic Payroll Submission Employers operating in the DMCC must submit employee payroll information electronically. Designated Bank/Exchange Wage payments must be made through a designated bank or exchange approved by the Central Bank of the UAE (CBUAE). Database The WPS allows the regulator to create a database that records wage payments in the private sector. Compliance All companies operating in the DMCC must register and comply with the WPS guidelines. Fines for Non-Compliance Employers in the DMCC will be subject to fines for non-compliance starting from January 2024. What are the consequences of non-compliance with DMCC’s Wage Protection System? Non-compliance with the DMCC Wage Protection System (WPS) can result in various consequences, including financial penalties, suspension of work permit issuance, and portal sanctions and fines. The consequences of non-compliance with DMCC’s Wage Protection System (WPS) vary depending on the year. According to DMCC guidelines, during 2023, no portal sanctions or fines are applicable. Starting in January 2024, the DMCC may impose portal sanctions and fines, which will be withdrawn from the company’s portal account, if a DMCC-registered company fails to transfer their employees’ due salary by the employment contract. The repercussions of non-compliance with the WPS may include financial penalties and the suspension of work permit issuance. Therefore, it is important for companies operating in the DMCC to register and comply with the guidelines to avoid any potential consequences of non-compliance. What are the requirements for companies to comply with DMCC’s Wage Protection System? To comply with the DMCC Wage Protection System (WPS), companies operating in the DMCC must follow the guidelines set by the system. Here are the requirements for companies to comply with the DMCC WPS: Registration: All companies operating in the DMCC must register with the WPS Electronic Payroll Submission: Employers must submit employee payroll information electronically Designated Bank/Exchange: Wage payments must be made through a designated bank or exchange approved by the Central Bank of the UAE (CBUAE) Timely Payment: Employers must ensure that all employees are paid their rightful wages on time Compliance: Companies must comply with the WPS guidelines to avoid penalties and sanctions Mandatory Compliance: All entities registered under DMCC must process their employee salary through WPS with effect from January 2024 Exemption: Government entities and public sector institutions are exempted from WPS compliance. By complying with the DMCC WPS, companies can ensure that their employees are paid their wages in a timely and fair manner, and avoid penalties and sanctions for non-compliance. To get the latest update on the laws and regulations regarding DMCC’s Wage Protection System (WPS), you can refer to DMCC’s official website and you can get in touch with Flying Colour Tax Consultant LLC. Get in touch with us and FlyingColour Tax Consultant LLC is here to assist in your payroll and WPS requirements and be compliant with all the UAE regulations in place now. We are a group of companies that can help you with your Accounting, Bookkeeping, Tax, Compliance, and Auditing needs. Call us for a detailed and thorough discussion and advisory and be hassle-free.