The UAE Ministry of Human Resources and Emiratisation (MoHRE) has published Ministerial Resolution 0340/2026 on the UAE salary payment regulation. Furthermore, this reform significantly modifies the wage payment regime in the UAE’s private sector. The new rules take effect on June 1, 2026, and apply to all companies registered with MoHRE in the country.
The regulation eliminates the 15-day grace period previously contemplated by the Wage Protection System (WPS). Moreover, it introduces an automatic and progressive sanctions regime. In fact, the severity of these sanctions increases based on the number of days of non-compliance. From the effective date, any salary payment after the first day of each month will count as delayed. Additionally, this happens without any prior complaint from the employee.
For Spanish companies with a presence in the Emirates, especially in construction, engineering, professional services and technology sectors, the new regulation requires an immediate review. Specifically, this affects payroll processes, treasury and internal oversight. In effect, the next three weeks are critical to adapt operations.
Below we analyze the regulatory framework, the provisions of the new resolution, the tiered sanctions regime, the exemptions contemplated, and practical recommendations to ensure compliance.
Regulatory Framework of Reference
Ministerial Resolution No. 0340 of 2026 — Wage Protection System
This is the central norm of the reform. It establishes the first day of each Gregorian month as the single wage due date for the private sector. Additionally, it mandates the use of WPS or authorized channels. Furthermore, it defines the tiered sanctions regime. MoHRE issued this resolution on May 12, 2026.
Federal Decree-Law No. 33 of 2021 — Labour Relations Law
This general framework regulates labour relations in the UAE’s private sector. It includes employer obligations regarding wage payments. Moreover, Resolution 0340/2026 builds on its provisions and strengthens its application.
Cabinet Resolution No. 21 of 2020 — Administrative Labour Sanctions
This norm regulates the administrative fines applicable to private sector companies for labour non-compliance. Furthermore, the financial sanctions arising from delayed salary payments apply under this resolution, starting from the eleventh day of non-payment.
What the New UAE Salary Payment Regulation Establishes
Resolution 0340/2026 introduces five structural changes to the wage payment regime.
First, the unified payment date. Employers must pay the previous month’s salaries on the first day of each Gregorian month. Also, any payment after that date counts automatically as delayed, with no additional margin.
Second, the mandatory channel WPS. Employers must channel payments through the Wage Protection System or other systems expressly authorized by MoHRE. This includes banks, exchange houses and financial institutions approved by the UAE Central Bank.
Third, the 85% compliance threshold. A company complies if it pays at least 85% of total salaries owed on the due date. Similarly, an employee does not count as unpaid if they receive at least 85% of their salary. This applies provided the difference comes from legally justified deductions.
Fourth, documentary obligation. Companies must submit documentation and data proving salary payment according to MoHRE procedures.
Fifth, outsourcing allowed but responsibility not transferable. Companies may delegate payment processing to external providers. However, the legal responsibility for timely payment always rests with the employer.
Tiered Sanctions Regime
Consequences activate automatically based on the days elapsed from the due date. Moreover, no prior complaint from the employee is required.
| Timeline | Consequence |
|---|---|
| Day 2 — Notifications and active monitoring | The authority sends notifications to non-compliant establishments and begins case tracking. The company enters the system as non-compliant. |
| Day 5 — New work permits blocked | The suspension of new work permits blocks the company’s ability to hire new personnel or renew existing labour visas. |
| Day 11 — Administrative fines and reclassification | Administrative fines apply under Cabinet Resolution No. 21 of 2020. Additionally, the company drops to the third category in MoHRE’s classification system. |
| Day 16 — Labour dispute opening and further suspensions | MoHRE registers ex officio an individual or collective labour dispute on behalf of affected workers. Work permits of companies with 25 or more unpaid employees face suspension. |
| Day 21 or more — Prosecution referral and coercive measures | For companies with 50 or more workers and repeat cases: forced recovery of unpaid salaries, precautionary seizure of assets, and travel ban for those responsible. |
Exempted Groups and Situations from WPS
Resolution 0340/2026 contemplates certain exceptions to WPS calculation. Furthermore, the following groups are excluded.
On one hand, workers with active salary disputes already referred to courts or with an enforcement order issued. This applies for the period and amount under litigation.
Additionally, workers with an active absenteeism report, during its validity.
Also, workers on approved unpaid leave or in a situation of inability to work due to judicial resolution.
On the other hand, foreign workers employed by foreign companies or their branches in UAE who receive their salary outside the country. This requires prior company request and MoHRE approval.
Finally, seafarers working aboard vessels, upon company request and in accordance with the applicable ministerial resolution.
Recommendations for Companies
The compliance with the UAE salary payment regulation requires operational review before June 1, 2026. Furthermore, below are six practical recommendations to adapt processes.
- Set day 1 as the effective payment date
Schedule payment orders with sufficient advance notice so the WPS transfer completes on day 1. Moreover, this applies even if it falls on a holiday or weekend.
- Payroll and treasury cycle audit
Review the complete process of payroll approval and payment to detect bottlenecks. Additionally, banking processing time must fit entirely within the previous month.
- Coordination with the payroll provider
If the company outsources payment, confirm the provider has MoHRE authorization. Also, verify they execute transfers before the due date. However, the legal responsibility remains with the employer.
- Contract and outsourcing agreement review
Verify that agreements with agencies and managed service providers contemplate payment dates aligned with the new day 1 deadline.
- MoHRE portal monitoring
Activate notifications in the MoHRE portal and in the WPS system. Consequently, the company will receive alerts about any incident before sanctions activate.
- Coordination with local labour advisor
Coordinate with a local labour advisor in UAE or with the internal HR team to evaluate specific impact. Especially in structures with employees in free zones, exempt workers or variable payrolls.
UAE Salary Payment Regulation: What Changes in Practice
It is important to emphasize that Resolution 0340/2026 does not modify employment contracts, wage amounts or agreed labour benefits. In effect, the change concerns exclusively the compliance and supervision structure of payment. Consequently, companies that already paid salaries on day 1 will notice little operational difference. However, the impact is greater for those that used the 15-day margin as habitual treasury practice.
Moreover, the measure forms part of the UAE government’s strategy to strengthen WPS. This system operates as electronic supervision of salary payments since 2009. On the other hand, the stricter sanctions regime aims to reduce repeated delays that especially affect workers in construction, hospitality and services.
Finally, companies registered in free zones with their own labour regulations (DIFC, ADGM) should verify whether Resolution 0340/2026 applies directly or if their specific regime prevails.
