• Last Updated: March 14. 2010 11:46PM UAE / March 14. 2010 7:46PM GMT
DUBAI // Eight hundred of the UAE’s biggest companies have been banned from hiring new workers because they did not join the federal Government’s new Wage Protection System (WPS) by the November 30 deadline.
The Ministry of Labour, in co-operation with the Central Bank, stipulated that all 269,100 companies in all seven emirates should pay their workers through banks by the end of May.
That enables the ministry to automatically check if a company is defaulting on salaries or making illegal deductions from salaries.
Under the first phase of the scheme, the country’s 4,100 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 3,000 large firms had signed up for the scheme, and that 1,100 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.
The grace period was granted only after the ministry ensured their workers were being paid regularly. The length of the grace period has not been disclosed.
The ministry has stopped issuing the remaining 800 big firms with new work permits.
Mr Ghobash said he was satisfied with the uptake, despite the sanctions levied against the offending companies.
“The figures reflects the increasing awareness on the WPS, among employers, which have proved its effectiveness as a tool guaranteeing that workers are being paid their salaries on time.”
Employees at some of the 800 companies who have yet to join the system say they have not received their salaries for some time.
Padakanti Janardhanan, 27, an Indian construction worker, said he had not been paid for three months.
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.
“They used to give us our wages in cash before. However, now they say they would pay to the bank but I have got nothing yet,” he said.
He welcomed the WPS – but said it had yet to make a difference to him and some of his colleagues who have also not been paid.
“The system is good but only if these companies are following it.”
With just a few dirhams left in his pocket, Mr Janardhanan is hoping to go back home: “I just want my passport back and want to go home. I have given up hope that I will be paid anything.”
Mohammed Usman, 32, a construction worker in Dubai, said: “We were told that, from this year, our salaries will go into the bank account. But work has stopped and we do not get full salaries now.”
He claimed his Sharjah-based employer has been paying workers intermittently – roughly every two or three months. “When they get money, they pay us. Many of the workers are sitting in the camp with no work,” said the Bangladeshi.
The deadline for the second phase of the scheme, which covers 35,000 companies that have between 15 and 99 employees, passed in late February, meaning that 80 per cent of the workforce should be covered by now.
The deadline for the third and final phase, covering 900,000 workers in 230,000 small companies, is May 31.
Nevertheless, officials said a total of only 6,000 medium and small-sized firms have enrolled in the plan so far, meaning that overall only about a third have signed up.
The ministry will start penalising medium-sized companies that have not complied at the end of March.
* With additional reporting by Praveen Menon