Under the UAE’s new enactments on payroll compliance, Ministerial Resolution No. 340 of 2026, there has been an increased emphasis on the timely wages to be paid by the UAE payroll system via the Wage Protection System (WPS). The new set of regulations is part of the country’s wider measures to bolster workers’ rights, enhance transparency and pay them on time.
The rules are applicable to most private-sector employers, but also specify certain types of employees and employment situations that are exempt from the WPS reporting requirements, which were published by the MoHRE. Employers should be aware of them and understand how they can stay compliant and not face big fines.
UAE Wage Protection System
The Wage Protection System is an electronic system to transfer salaries, which allows monitoring of the salaries by MoHRE and Central Bank of the UAE made from private sector companies.
In the new 2026 system, employers are supposed to take care to compute salaries as per the given deadline. The system automatically monitors compliance and notifies about late payments or missing payments, enabling authorities to take suitable measures as needed. But not all workers have to be included in monthly WPS salary files.
Who can be exempted from WPS UAE 2026?
Ministerial Resolution No.340 of 2026 provides a list of the different categories of employees that could be accorded a legal exemption from submitting salary to the WPS.
1. Employees on Approved Unpaid Leave
Addressing the question of whether laborers are allowed to be removed from payroll during an approved period of unpaid leave is irrelevant if the worker has formally taken such leave and it has been announced as approved.
It is important that documentation is ensured which shows that the leave was accepted and officially recorded in company documentation.
2. Employees Involved in Active Labor Disputes
If disputes about salaries are being investigated by MoHRE or court, the employer might not be required to proceed with salary payments using WPS until a decision has been made conclusively by the court or MoHRE.
If asked by authorities, companies need to have all the relevant documentation regarding disputes.
3. Workers Reported as Absconding
If an employee has officially been declared absconded, they may not be counted in the WPS reporting process and if the employee has left their open position they may be excluded.
This exemption only extends after the employer has adhered to legal reporting through the proper channels to the government.
4. Mission Work Permit Holders
Employees subject to mission permits or short-term work permits which are less than 3 months could potentially be outside the normal WPS reporting regime.
Typically, these permits are granted for a temporary job assignment, a particular project or specialized expertise.
5. Employees Paid Outside the UAE
UAE-based employers who utilize an overseas payroll system for all employees may be able to exempt certain employees.
In other organizations, these arrangements are usually to cover foreign units of operations, overseas branches and assignments abroad.
6. Other Approved exceptional cases
In certain cases, MoHRE can grant other exemptions that do not have WPS available. Employers are advised to ask for official confirmation that there is a specific exemption that can be applied in particular to their employees.
Why Employers Must Be Careful?
Notified as an exempting employer does not take the place of an employer’s responsibilities to pay workers under UAE Labor Laws.
The companies still have to keep up to date employment records, work contracts, leave records and supporting documents for anyone not entered in WPS records.
If it is not justified correctly, an exemption may lead to non-compliant actions and punishment related to monetary fines.
What Employers Should Do Next?
For HR teams and business owners, it’s time to review and reassess their workforce classification under the 2026 guidelines.
Those employees removed from the reporting under WPS should have such a legal action in writing per Article 4 or any regulations otherwise. Keeping records clear can make it easy for the organization to prevent disputes and prove compliance if audited and inspected.
FAQs
Will employers be able to stop paying exempt employees?
No. Exemption from WPS reporting will not remove an employer’s contractual responsibility for paying wages where there remains a contractual obligation under labour law.
Do temporary workers have to follow WPS?
In some instances, mission and short-term work visa holders might be eligible for exemption based on their employment status and type.
How can employers be certain if an employee qualifies for exemption?
Employers must ensure that they refer to MoHRE guidelines, check the provisions in Ministerial Resolution No. 340 2026, and obtain legal and HR assistance if needed.
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