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UAE: Optional inclusion of domestic workers in WPS lacks clarity

On January 31, 2022

The UAE’s Ministry of Human Resources and Emiratisation (MoHRE) announced that effective 27 January, 2022, the Wage Protection System (WPS) will be extended to domestic workers on a voluntary basis. Employers will have the option of paying domestic workers' wages through banks, exchange offices, and smart apps provided by financial institutions that have been authorised to provide this service by the Central Bank.

According to Khalil Khoury, the assistant undersecretary for Domestic Labour Affairs at the MoHRE, "the voluntary application of the wage protection system to domestic workers stems from the Ministry's desire to provide excellent services to employers to help them easily pay domestic workers' wages on the specified dates, while preserving their right to prove the process of paying wages.”

The elective inclusion of domestic workers in the UAE’s WPS is not entirely new. In 2020, the MoHRE and First Abu Dhabi Bank launched an optional WPS system for domestic workers. Tadbeer centres have also offered WPS bank accounts for domestic workers prior to this announcement.

In 2009, the UAE became the first Gulf Cooperation Council (GCC) country to implement a wage protection system. In 2016, the MoHRE issued Ministerial Decree No. 739 Concerning the Protection of Wages, which required all private-sector employers registered with the MoHRE to pay employees through the WPS.

While the decree penalises employers who do not pay their employees through the WPS (see sidebar), it is unclear whether the same penalties will be applied to employers of domestic workers who voluntarily register with the WPS, as the decree only applies to the private sector establishments that are covered by the the labour law (Federal Law No. 8 of 1980).

The UAE’s domestic workers law (the main legislation that concerns domestic workers’ wages,  given their exclusion from the labour law) provides limited protection for domestic workers against wage theft. While the law stipulates monthly payment of wages, it also leaves room for deduction of wages and end-of-service benefits if workers are found responsible for the “loss or damage of the tools, machines, products or materials owned” by the employer (Article 11).

Although there are no recent official statistics on the number of domestic workers in the UAE, earlier data indicate that there were approximately 750,000 domestic workers in the country in 2017, accounting for nearly 20% of all migrant workers in that year.

Domestic workers are excluded from wage protection systems across the GCC. Recent initiatives to encourage bank or electronic payments to domestic workers — while a step forward — are not part of the WPS. The UAE’s decision seems to fall somewhere in between,  as domestic workers cannot be said to be fully incorporated into the system if: 1) the decision to register domestic workers ultimately lies with the employer; 2) the employer does not face the penalties associated with WPS; and 3) if domestic workers are not included in the labour law, since all WPS regulations relate to the labour law alone.

The WPS is only as effective as the wider regulatory environment, which, especially for domestic workers, remains weak. For example, the MoHRE recently announced that employers can cancel domestic workers' permits with the touch of a button, using the ministry’s smart app. A system that allows employers to render workers irregular so easily can be abused by employers to quash wage theft complaints.