Aquí tienes la traducción completa al inglés:
The Ministry of Human Resources and Emiratisation (MoHRE) has issued Ministerial Resolution No. 0340/2026, a reform that significantly changes the salary payment framework applicable to the private sector in the United Arab Emirates. The Resolution enters into force on 1 June 2026 and applies to all companies registered with MoHRE in the country.
The reform eliminates the 15-day grace period previously provided for under the Wage Protection System (WPS) regulations and introduces a system of automatic and progressive penalties, the severity of which increases depending on the number of days of non-compliance. From the date on which the Resolution enters 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 operating in the UAE, particularly in the construction, engineering, professional services and technology sectors, the new Resolution requires an immediate review of payroll, treasury and internal monitoring processes. The next three weeks will be critical for adapting their operations.
The following sections examine the applicable regulatory framework, the provisions of the new Resolution, the graduated penalty system, the available exemptions and practical recommendations for ensuring compliance.
Applicable regulatory framework
Ministerial Resolution No. 0340 of 2026 — Wage Protection System
This is the central regulation underpinning the reform. It establishes the first day of each Gregorian calendar month as the single salary payment deadline for the private sector, requires payments to be made through the WPS or other authorised channels, and defines the graduated penalty system. 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 legal framework governing employment relationships in the UAE private sector, including employers’ obligations regarding the payment of salaries. Resolution No. 0340/2026 is based on its provisions and strengthens their enforcement.
Cabinet Resolution No. 21 of 2020 — Administrative Labour Penalties
This Resolution regulates the administrative fines applicable to private-sector companies for labour-related violations. Financial penalties resulting from delayed salary payments are imposed under this Resolution from the eleventh day of non-payment onwards.
What the new regulations establish
Resolution No. 0340/2026 introduces five structural changes to the salary payment framework:
Standardised payment date
Salaries for the previous month must be paid on the first day of each Gregorian calendar month. Any payment made after that date is automatically considered late, with no additional grace period.
Mandatory payment channel: WPS
Payments must be processed through the Wage Protection System or through other systems expressly authorised by 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 results from legally justified deductions.
Documentary obligations
Companies must submit documents and data demonstrating that salaries have been paid in accordance with MoHRE procedures.
Outsourcing permitted, but liability cannot be transferred
Companies may delegate payment processing to external service providers. However, legal responsibility for ensuring that salaries are paid on time always remains with the employer.
Graduated penalty system
Consequences are triggered automatically depending on the number of days that have elapsed since the payment deadline. No prior complaint from the employee is required.
| Deadline | Consequence |
|---|---|
| Day 2 — Notifications and active monitoring | 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 | MoHRE suspends the issuance of new work permits for the company, preventing it from hiring new employees or renewing existing employment visas. |
| Day 11 — Administrative fines and reclassification | Administrative fines are imposed under Cabinet Resolution No. 21 of 2020. The company is reclassified into the third category under MoHRE’s classification system. |
| Day 16 — Opening of a labour dispute and additional suspensions | 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 later — Referral to the Public Prosecution and enforcement measures | For companies with 50 or more employees and in cases of repeated non-compliance, measures may include the enforced recovery of unpaid salaries, precautionary attachment of assets and travel bans imposed on the responsible individuals. |
Categories of employees and situations exempt from the WPS
Resolution No. 0340/2026 provides for certain exceptions from the WPS calculation. The following are excluded:
- Employees with active salary disputes that have already been referred to the courts or are subject to an enforcement order, for the disputed period and amount.
- Employees who are subject to an active absence-from-work report, for as long as the report remains in effect.
- Employees on approved unpaid leave or who are unable to work pursuant to a court decision.
- Foreign employees working for foreign companies or their UAE branches who receive their salaries outside the country, subject to an application by the company and approval from MoHRE.
- Seafarers working on board vessels, subject to an application by the company and compliance with the applicable ministerial resolution.
Recommendations for companies
1. Establish the first day of the month as the effective payment date
Payment instructions should be scheduled sufficiently in advance to ensure that the WPS transfer is completed by the first day of the month, even when that date falls on a public holiday or weekend.
2. Audit the payroll and treasury cycle
Review the entire payroll approval and payment process to identify potential bottlenecks. All bank processing time should fall entirely within the previous month.
3. Coordinate with the payroll provider
Where salary payments are outsourced, companies should confirm that the provider is authorised by MoHRE and processes transfers before the deadline. Legal responsibility remains with the employer.
4. Review contracts and outsourcing agreements
Verify that agreements with agencies and managed service providers include payment dates aligned with the new deadline of the first day of each month.
5. Monitor the MoHRE portal
Enable notifications on the MoHRE portal and within the WPS to receive alerts regarding any issues before penalties are triggered.
6. Seek specialised legal advice
Consult a UAE labour law specialist to assess the specific impact of the Resolution, particularly for structures involving employees in free zones, exempt employees or variable payroll arrangements.
What changes in practice and what remains unchanged
It is important to emphasise that the Resolution does not amend employment contracts, salary amounts or agreed employment benefits. The change relates exclusively to the compliance and monitoring framework governing salary payments.
Companies that already paid salaries on the first day of each month will experience little operational difference. The impact will be greater for companies that previously relied on the 15-day grace period as part of their usual treasury practices.
The measure forms part of the UAE government’s strategy to strengthen the WPS as an electronic salary-payment monitoring system, which has been operational since 2009. The stricter penalty framework is intended to reduce repeated payment delays, which particularly affect employees in the construction, hospitality and services sectors.
Companies registered in free zones with their own employment regulations, including the DIFC and ADGM, should verify whether Resolution No. 0340/2026 applies to them directly or whether their specific regulatory framework takes precedence.
Do you need to assess the impact on your company?
Our team specialises in UAE labour law, has maintained a permanent presence in Dubai since 2012 and has advised more than 80 Spanish companies on establishing their operations in the Emirates. We can help you adapt your processes, review your contracts and ensure compliance with Resolution No. 0340/2026 before 1 June 2026.
