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Companies registered in the mainland UAE and in the DMCC and JAFZA free zones are required to pay salaries through the Wages Protection System (WPS) initiated by the government. However, certain payments to employees are excluded from WPS compliance and may be settled via a direct bank transfer.

All labor relations in the mainland UAE and free zones (except DIFC and ADGM) are governed by the federal labor law (Federal Decree-Law No. 33 of 2021) and internal regulations of free zones. Each employee must have a valid employment contract registered with Ministry of Human Resources and Emiratisation (for mainland companies) or with a free zone authority.

Employers are fully responsible for:
  • Processing visas and work permits
  • Labor contract registration
  • Compliance with requirements regarding working hours and annual and sick leaves
POSSIBLE IMPLICATIONS OF NON-COMPLIANCE
Labor law and WPS compliance are high-risk areas exposing businesses to severe penalties for violations.
OPERATIONAL RISKS:
suspension of new work permits and employment visas, license suspension and potential additional inspections
REPUTATIONAL RISKS:
company downgrading to a high-risk category, difficulties with hiring qualified personnel
SANCTIONS RISKS:
fines of up to AED 50,000 per employee, legal proceedings

HOW BAONE CAN HELP


Our experts analyzed dozens of client cases and developed a comprehensive UAE labor

law and payroll operations navigator.

WHAT THE NAVIGATOR COVERS
  • FULL EMPLOYMENT LIFE CYCLE
    A detailed review of each stage — from employment visa processing to correct employment termination (end-of-service gratuity payment) without incurring legal risks
    1
  • WPS OPERATING PROCESS
    Step-by-step algorithm — from choosing an agent to preparing an error-free Salary Information File (SIF)
    2
  • ANALYSIS OF CONTROVERSIES
    Regulatory-compliant ways to report overtime work, leaves and bonuses to avoid system errors
    3
  • RISK MITIGATION
    Ways to avoid typical pitfalls during MoHRE inspections that lead to delays and penalties
    4
  • RELEVANT DATABASE
    A list of authorized banks, exchange houses and fintech platforms (such as Edenred and Wio) to match your business size
    5
WHY GET OUR PRODUCT NOW
  • Risk mitigation in preparation for MoHRE inspections
    Current trends allow us to predict how regulators will implement control mechanisms in 2026.
  • Time savings
    Our definitive guide provides answers to frequently asked questions combined with real-life case studies.
  • Cost savings
    Purchasing a comprehensive guide is far less expensive than an individual consultation.
READY TO DE-RISK YOUR BUSINESS?
Use our guide* to check your business for regulatory compliance!
*Available in electronic format, with no obligation on BaOne for further updates.
OUR TEAM

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