UAE ministry urges private sector companies to pay employees on time

Businesses that fail to pay their staff will have insurance premium increased from Dh120 to Dh250 for each employee

Private sector companies must pay their employees on time. Getty Images

The Ministry of Human Resources and Emiratisation has urged private sector companies in the UAE to pay employees on time.

Businesses that fail to pay their staff will have their insurance premium increased from Dh120 ($33) to Dh250 for each employee, state-run news agency WAM said.

In October 2018, the ministry implemented a new insurance policy for employees, called Taa-meen.

It was approved by the Cabinet in June 2018 and was intended to be an alternative to the monetary guarantee provided by employers, which costs Dh3,000 per worker.

The insurance policy covers the financial entitlements of employees for 30 months, as per the UAE's Wage Protection System.

This is to maintain labour stability and ensure the rights of employees regarding salaries.

In case of a company’s bankruptcy or failure to pay their employees’ benefits, the policy will provide maximum insurance coverage up to Dh20,000 per employee against unpaid salaries, end of service benefits, vacations and overtime allowances, and return air tickets.

If the employer does not honour their commitments, the ministry can suspend the employer’s labour file and freeze new work permits.