WPS salary protection system. How to open an account in the UAE and WPS?
When opening a corporate account in the UAE, the bank also provides access to salary payments through the WPS system. In this article we will look at what WPS is and how it works.
What is WPS and how does it relate to opening a bank account in the UAE?
The Wages Protection System (WPS) is an electronic salary transfer system that allows organizations to pay salaries to employees through banks, bureaus and financial institutions approved and authorized to provide this service.
This system was developed by the Central Bank of the UAE. It allowed the Ministry of Labor to create a database that records wage payments in the private sector. This allows you to guarantee the payment of an agreed salary amount and timely payment.
The WPS system covers all institutions registered with the Ministry in all sectors and industries and brings obvious benefits to all categories of workers.
All employers who are registered with the Ministry of Labor must work through WPS, regardless of their size. Free Zone companies must also pay salaries through WPS.
The creation of the WPS system once again proves the leading position of the UAE in the region. Thanks to this system, the Emirates now, among other things, is also worthy of imitation in the following points:
Serious intention to protect the wages of workers.
Providing innovative solutions that help employers protect their own interests and reduce the time and effort needed to pay wages to workers.
Taking serious measures to improve labor protection in order to strengthen working relations in the UAE and protect the rights of all stakeholders.
Support transparency and competitiveness.
Ensuring regular and continuous updating by the Ministry of Labor of wage data in the private sector to ensure that employers fulfill their wage obligations.
Protective and proactive measures are being taken to reduce wage labor disputes.
WPS interacts with the following partners of the Ministry:
Employees. This is every person who works in the private sector for an agreed salary, which has a work card issued by the Ministry.
Employers, i.e. everyone who owns a company registered with the Ministry and hires one or more employees for an agreed salary.
Banks. Namely, the financial institution in which the employer has a bank account in the UAE, which is used to transfer the amount to pay salaries through WPS to a designated agent for distribution to employees.
Agents, i.e. any bank, bureau of exchange or financial institution approved and authorized by the Central Bank of the UAE for the provision of salary payment services through WPS. The Central Bank regularly publishes an updated list that displays the names of approved and authorized agents.
What requirements need to be met when starting a business in the UAE to start working with WPS?
To work with WPS, the following conditions must be met:
The company must be registered with the Ministry.
The company must have a bank account in the UAE.
The company must enter into an agreement with any bank, exchange bureau or financial institution approved and authorized by the Central Bank of the UAE for the provision of the service. Both parties must agree on service fees.
As an example of a bank, Commercial Bank of Dubai is an approved bank for providing WPS service.
Opening a corporate bank account in the UAE at the Commercial Bank of Dubai
The salary of employees will be transferred through the WPS within the deadlines specified in the Ministry Resolution No. 788 of 2009.
The institution will have to transfer the salaries of employees through the WPS within two weeks from the date of the requested date or within the terms specified in the employment contract, if salaries are paid more than once a month.
The employer must pay all costs associated with participation in the WPS, including bank fees, service provider fees and all other costs. Employers do not have the right to transfer any costs to employees in any way. Including it is impossible directly or indirectly to keep these expenses from their salaries.
How can a company registered in the UAE become a member of WPS?
To become a member of WPS, you need to act in the following scenario:
A company must open a bank account in the UAE if it does not already have an account in the Emirates at the time of joining WPS.
The company must enter into a contract with a WPS agent. The agent must be approved and authorized by the Central Bank of the UAE to provide WPS services. It may be a bank, bureau of exchange or financial institution.
The employer issues instructions to his bank for the transfer of salaries to employees. The instructions should be accompanied by a detailed list of data for the payment of salaries. A copy of the list is sent to the agent.