New salary regulations in the UAE: the first day of each month as the unified deadline for the private sector
The Ministry of Human Resources and Emiratisation (MoHRE) has published Ministerial Resolution 0340/2026, a reform that significantly modifies the salary payment regime in the private sector of the United Arab Emirates. The regulation enters into force on 1 June 2026 and affects all companies registered with the MoHRE in the country.
The change eliminates the 15-day grace period previously provided under the Wage Protection System (WPS) regulations and introduces an automatic and progressive sanctions regime, with penalties increasing according to the number of days of non-compliance. From its entry into force, any salary payment made after the first day of each month will be considered late, without the need for a prior complaint from the employee.
For Spanish companies with a presence in the Emirates, particularly in the construction, engineering, professional services and technology sectors, the new resolution requires an immediate review of payroll, treasury and internal supervision processes. The next three weeks are critical to adapt operations.
Below, we analyse the regulatory framework, the provisions of the new resolution, the graduated sanctions regime, the exemptions provided and practical recommendations to ensure compliance.
Regulatory framework
Ministerial Resolution No. 0340 of 2026 — Wage Protection System
This is the central regulation behind the reform. It establishes the first day of each Gregorian month as the single salary due date for the private sector, requires the use of the WPS or authorised channels, and defines the graduated sanctions regime. It was issued on 12 May 2026 by the Ministry of Human Resources and Emiratisation.
Federal Decree-Law No. 33 of 2021 — Labour Relations Law
This is the general framework governing labour relations in the UAE private sector, including employers’ obligations regarding salary payments. Resolution 0340/2026 is based on its provisions and strengthens its enforcement.
Cabinet Resolution No. 21 of 2020 — Labour administrative sanctions
This resolution regulates the administrative fines applicable to private-sector companies for labour-related breaches. Financial penalties arising from salary delays are applied under this resolution from the eleventh day of non-payment.
What the new regulation establishes
Resolution 0340/2026 introduces five structural changes to the salary payment regime:
Unified payment date. Salaries for the previous month must be paid on the first day of each Gregorian month. Any payment made after that date is automatically considered late, with no additional grace period.
Mandatory channel: WPS. Payments must be made through the Wage Protection System or other systems expressly authorised by the MoHRE, including banks, exchange houses and financial institutions approved by the Central Bank of the UAE.
85% compliance threshold. A company is considered compliant if it pays at least 85% of the total salaries due by the payment deadline. An employee is not considered unpaid if they receive at least 85% of their salary, provided that the difference arises from legally justified deductions.
Documentary obligation. Companies must submit documentation and data proving salary payment in accordance with MoHRE procedures.
Outsourcing permitted, responsibility non-transferable. Companies may delegate payment processing to external providers, but legal responsibility for timely salary payment always remains with the employer.
Graduated sanctions regime
The consequences are triggered automatically according to the number of days elapsed from the payment deadline. No prior complaint from the employee is required.
Day 2 — Notifications and active monitoring
The MoHRE sends notifications to non-compliant establishments and begins monitoring the case. The company is recorded as non-compliant in the system.
Day 5 — Suspension of new work permits
The MoHRE suspends the issuance of new work permits for the company, blocking the possibility of hiring new staff or renewing existing labour visas.
Day 11 — Administrative fines and reclassification
Administrative fines are applied under Cabinet Resolution No. 21 of 2020. The company is reclassified into the third category within the MoHRE classification system.
Day 16 — Opening of a labour dispute and further suspensions
The MoHRE automatically registers an individual or collective labour dispute on behalf of the affected employees. Work permits are suspended for companies with 25 or more unpaid employees.
Day 21 or more — Referral to the Public Prosecution and coercive measures
For companies with 50 or more employees and in repeated cases: forced recovery of unpaid salaries, precautionary seizure of assets and travel bans for responsible individuals.
Groups and situations exempt from WPS
Resolution 0340/2026 provides for certain exceptions to WPS calculations. The following are excluded:
Employees with active salary disputes already referred to the courts or subject to an enforcement order, for the period and amount under dispute.
Employees with an active absconding report, for the duration of that report.
Employees on approved unpaid leave or in a situation of inability to work by court order.
Foreign employees working for foreign companies or their UAE branches who receive their salary outside the country, subject to a request by the company and approval by the MoHRE.
Seafarers working on board vessels, subject to a request by the company and in accordance with the applicable ministerial resolution.
Recommendations for companies
- Set the first day of the month as the effective payment date
Schedule payment orders sufficiently in advance so that the WPS transfer is completed on the first day of the month, even if it falls on a public holiday or weekend.
- Audit the payroll and treasury cycle
Review the full payroll approval and payment process to identify bottlenecks. Bank processing time must be fully covered within the previous month.
- Coordinate with the payroll provider
If payment is outsourced, confirm that the provider is authorised by the MoHRE and that transfers are executed before the deadline. Legal responsibility remains with the employer.
- Review contracts and outsourcing agreements
Verify that agreements with agencies and managed service providers include payment dates aligned with the new first-day deadline.
- Monitor the MoHRE portal
Activate notifications on the MoHRE portal and in the WPS system to receive alerts about any incident before sanctions are triggered.
- Seek specialised legal advice
Consult a UAE labour law expert to assess the specific impact, particularly in structures involving free zone employees, exempt workers or variable payroll arrangements.
What changes in practice and what does not
It is important to note that the resolution does not modify employment contracts, salary amounts or agreed employment benefits. The change relates exclusively to the structure of compliance and supervision of salary payments. Companies that already paid salaries on the first day of each month will see little operational difference; the impact will be greater for those that had been using the 15-day grace period as a regular treasury practice.
The measure forms part of the UAE government’s strategy to strengthen the WPS as an electronic salary payment supervision system, which has been in operation since 2009. The stricter sanctions regime seeks to reduce repeated delays, particularly those affecting workers in the construction, hospitality and services sectors.
Companies registered in free zones with their own labour regulations, such as DIFC and ADGM, should verify whether Resolution 0340/2026 applies directly to them or whether their specific regime prevails.
Do you need to review the impact on your company?
Our team specialised in UAE labour law, with a permanent presence in Dubai since 2012 and more than 80 Spanish companies advised in their establishment in the Emirates, can help you adapt your processes, review your contracts and ensure compliance with Resolution 0340/2026 before 1 June 2026.
