800 firms banned from hiring in UAE

UAE Ministry of Labour

Authorities in the United Arab Emirates have banned 800 hundred of its biggest companies from hiring new employees because they failed to join the federal government's new Wage Protection System (WPS) by the 30 November deadline.

The Central Bank and the Ministry of Labour decided that all of the seven emirate's 269,100 companies should pay their workers through banks by the end of may this year. This way the ministry can keep tabs on every company and monitor whether any of them are defaulting on salaries or making illegal deductions.

Under the first phase of the scheme, the country's 4100 or so companies with at least 100 employees - which employ a total of 2.1 million workers - had to comply by the end of November.

The Minister of Labour, Saqr Ghobash, said yesterday that some 3000 large firms had signed up for the scheme, and that 1100 had not. About 300 of those have been granted a grace period because they claimed to have "technical issues" that prevented them from joining on time, as reported by Zawya.

Failing to pay workers regularly

From now, the ministry has stopped issuing the 800 big firms yet to sign up any new work permits.

Companies in the UAE have developed a reputation for failing to pay workers regularly, and even though many are in support of the WPS it is yet to make a real difference to the way companies operate.

A worker for a Sharjah construction company with 900 employees, Mr. Janardhanan claimed the company had promised to credit his salary to the bank for months but had not done so yet. "I just want my passport back and want to go home. I have given up hope that I will be paid anything," he said.

There are two more phases of the scheme, the second of which passed at the end of February and the third will pass on 31 May. These cover smaller firms, and the ministry will start penalising medium-sized companies that have not complied at the end of March.

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Daniel Jones

Daniel is a Politics and Philosophy graduate from Cardiff University where he also worked as a section editor on the award winning student newspaper. After university he joined an IT support company where he was a B2B online writer. He loves anything to do with sport and joined GDS in July 2009.

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