Key Insights for the WPS System Implemented by DMCC
In a huge forward leap, the Dubai Multi Commodities Centre (DMCC) free zone has implemented a new Wage Protection System (WPS) to protect workers’ rights in line with the. Companies operating in DMCC are required to abide by the new WPS requirements which have been implemented by the free zone authority to promote fair and ethical business practices and ensure the timely payment of wages. Consult with accounting companies in Dubai to understand how you can ensure compliance with the new WPS rule in DMCC.
If you are a company in DMCC, failing to meet the WPS requirements may amount to compliance failure. To help you avoid non-compliance, we have prepared the below blog that details the basic provisions related to the implementation of WPS in DMCC. Read ahead to learn more:
What is the Wage Protection System in the UAE?
WPS is an electronic salary transfer system that came into effect in the UAE in July 2009. The WPS system enables companies registered in the UAE to pay the wages of their employees through banks or exchanges that are approved and authorized to provide the service. The WPS system was created by the Central Bank of the UAE (CBUAE) with which the regulator has been able to create a database that records wage payments in the private sector to ensure the timely and full payment of agreed-upon wages. The DMCC free zone announced on 18th January 2023 that it would be implementing the UAE WPS for employee salary payments.
Is Registering for WPS Mandatory in WPS?
All DMCC companies, with effect from 15th February 2023, are required to register all their employees holding an active or expired employment visa or Personal Identity Card (PIC) for the WPS salary transfer with a bank or exchange house. This requirement is irrespective of whether the employee does or does not have a bank account. It means payment of employee salary via WPS transfer is mandatory for all the DMCC member companies. Accounting firms in Dubai can help you with WPS registration and other related requirements.
WPS Registration in DMCC for Shareholders
As per a DMCC communique, shareholders holding member company-issued residence visas are not required to register for salary transfers. Companies providing accounting & payroll services in Dubai can provide further information in this regard.
WPS Registration in DMCC New Employees
In line with the information released by the free zone authority, DMCC-registered companies (employers) are required to register any new employees for salary transfer in the following cases:
- Immediately after the issuance of the Company Employment Card (CEC)
- Immediately after the approval of the Personal Identity Card (PIC) application
DMCC WPS Registration for Firms with No Employees
If a DMCC-registered entity has no employees, it is not required to take any action as of now. However, accounting & payroll service providers in Dubai can update you if the free zone authority releases any new information in this regard.
Key Things to Remember for WPS in DMCC
Companies registered in DMCC need to consider the following while registering for WPS:
- Salaries for employees must be paid in AED
- Any charge imposed by the banks or exchange houses should not be deducted from the wages/salaries of the employees
- It is mandatory for the companies to register their employees with banks or exchange houses authorized by the CBUAE
Consequences of Non-compliance
The DMCC guidelines state that no portal sanctions or fines apply in 2023 for failing to comply with the WPS requirements. However, effective from January 2024, if a DMCC-registered company fails to transfer their employees’ due salaries as per the employment contract, the free zone authority may implement portal sanctions and fines, which will be deducted from the company’s portal account. Accounting companies in Dubai can help you avoid fines for compliance failure.
Why WPS Implementation in DMCC is Important?
In line with the new guidelines, all DMCC companies are required to register with WPS and comply with the rules. The WPS requires employers to submit employee payroll information electronically and make wage payments through a designated bank/exchange. Registering in WPS helps prevent the manipulation of payroll records and ensures that all employees are paid their rightful wages on time. By implementing WPS in DMCC, the free zone authority provides a secure and efficient platform for companies to ensure that workers are treated fairly and ethically.
DMCC WPS Registration: Accounting Firms in Dubai can Help you
To ensure compliance with WPS in DMCC, you need the expertise and experience of accounting firms in Dubai that provide robust payroll services. Jitendra Chartered Accountants (JCA) offers end-to-end support to your business by providing bespoke payroll services in Dubai, UAE. Our payroll services in Dubai include services pertaining to employee benefits such as gratuity, other end-of-service benefits (EOSB), annual leave encashment, loans and salary advance. Consult with us today to ensure seamless compliance with WPS requirements.