The employers of the UAE have to pay a fine of up to Dh 200000 when they fail to clear the salaries of their employees when their firms are shutting down. As per Article 1(1) of the Wages Protection System Law of Wages Protection System of the Ministry of the UAE, employers ought to pay salary regularly on due dates to their employees. On the failure of this, adequate actions will be taken by The Ministry of Human Resources and Emiratisation (MoHRE), which is according to Article 16 (2) of the Cabinet Resolution.

When companies stop their activity or establishment without settling the entitlements of the employee, the employer will have to face a fine of Dh 50000 to Dh 200000. Such activities will be considered as a violation of the provision of this Decree-Law and implementing resolutions. Further, the employee could file such cases according to Article 60 (4) of the Employment Law.

An employee must be paid with the specified salary at least once a month when no such period is mentioned in the Employment Contract. Otherwise, a salary has to be given on the first day of the month after the recorded payday stated in the Contract. Furthermore, unless it is stated in the employment contract, it is also important to clear the salaries of employees within 15 days of the due date. Without this, it will be deemed as a late payment of salary as per Article 1 (2) of the Wages Protection System Law.

For failing to pay the salaries of employees regularly, warnings, legal punishments and penalties have to be endured by companies, by Article 1 of the Amended Wages Protection System Law, when they continue to delay in paying the wages. Apart from that, after informing MoHRE, one could leave the job without serving a notice period to their employer by terminating their employment contract. Such steps can be taken when the employer has failed to give your wages for a while. This provision of law is according to Article 45 (1) of the Employment Law.

Besides that, it can be done when the employer violates his duties that are mentioned in the employment contract, which is also known as decree-law. In addition to that, the employee could inform the Ministry 14 days before the date of leaving the job. After being notified by the Ministry the employer fails to remedy the breach.

As per Article 54 of the Employment Law read with Article 31 of Cabinet Resolution No.1, an employee may think of lodging a grievance with the MoHRE about the claims for end-of-service entitlement and outstanding salaries from the employer. However, this can be done after you resign from the firm. Based on the letter provided by the MoHRE authorising individuals to lodge an employment case within 14 days in the court, employees could file a case against their employer, when there is no peaceful resolution with their boss.

Apart from the payments that belong to the public treasury and alimony of an employer’s family, above all other liabilities of an employer the settlements payable to the worker by an employer get the priority, based on Article 65 (7) of the Employment Law.

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