The change tightens payroll timing and makes enforcement more immediate, with fewer delays allowed.
What changed
Under the previous system, companies had a 15-day grace period after salaries were due before penalties could apply. That grace period has now been removed.
Going forward, salaries for the previous month must be transferred by the 1st day of the new month through the Wage Protection System (WPS) or another MOHRE-approved channel. Any payment after that date is considered late.
Early payments are allowed as long as they are properly processed through approved systems.
The 85% rule
A company is still considered compliant if at least 85% of total wages are paid on time.
This allows for limited exceptions such as lawful deductions or partial withholding under UAE labour regulations (for example, disciplinary cases or court orders).
Employees involved in active wage disputes or officially marked as absconding are excluded from WPS calculations for the relevant period.
What happens if payments are late
Enforcement is phased and escalates quickly:
- Day 2 — MOHRE sends delay notifications to the company
- Day 5 — new work permit applications are blocked
- Day 11 — financial penalties begin
- Later stages — possible travel restrictions for company owners or managers, plus further legal action
Who is affected
The rule applies to all private sector companies registered under MOHRE.
Free zone companies follow their own labour systems, but many already use WPS-aligned payroll processes and may choose to adopt similar timelines.
What employers should do
Businesses that currently run payroll mid-month or with delays will need to adjust.
Key steps include:
- Updating payroll cycles to meet the 1st-of-month deadline
- Ensuring sufficient funds are available before month-end
- Keeping payroll records updated, as compliance is monitored automatically through WPS
