UAE authorities have started tightening enforcement against delayed salary payments after a new wage payment rule came into effect on June 1, resulting in a sharp increase in payroll processing activity across the private sector.Under Ministerial Resolution No. 340 of 2026 issued by the Ministry of Human Resources and Emiratisation (MoHRE), private sector employers are now required to pay employee salaries on the first day of every Gregorian month for the previous month’s work.Previously, companies had until the 10th day of the month to disburse wages. Under the revised framework, any payment made after the first day is considered delayed, exposing employers to penalties and regulatory action under existing labour laws.
Payroll activity more than doubles
As companies rushed to comply with the new rule, Al Ansari Exchange reported a more than 151 per cent increase in the number of businesses processing salaries through its Wage Protection System (WPS) platform on June 1, the first day of implementation, Gulf News reported.The surge reflects widespread efforts by employers to align payroll operations with the stricter salary payment timeline introduced by the government.The Wage Protection System, jointly overseen by MoHRE and the UAE Central Bank, is designed to ensure timely wage payments and strengthen compliance monitoring across the labour market.
SMEs scramble to adapt
The revised rules have particularly affected small and medium-sized enterprises (SMEs), many of which have had to adjust cash-flow planning and payroll schedules to meet the new deadline.Human resources consultants have advised businesses to strengthen payroll planning, maintain adequate liquidity and communicate proactively with employees to avoid disruptions during the transition period.
UAE workforce and payroll volumes rise
The implementation comes amid continued expansion of the UAE labour market. According to UAE Central Bank Wage Protection System data, the number of registered employees rose from 6.06 million in 2024 to 7.26 million in 2025.Salary transactions also increased significantly, reaching 79.5 million transactions worth Dh409 billion in 2025, compared with 67.5 million transactions valued at Dh341 billion a year earlier.The number of registered employers climbed 15% to 368,448 in 2025 from 321,007 in 2024.
Focus on transparency and worker protection
According to the Gulf News, Ali Al Najjar, Chief Executive Officer of Al Ansari Exchange, said the new regulation marks an important step towards strengthening transparency, accountability and employee protection in the UAE labour market.He noted that reliable and efficient payroll solutions will play an increasingly important role as employers adapt to the updated compliance requirements.The move forms part of broader UAE efforts to strengthen labour market governance, safeguard employee rights and standardise wage payment practices across the private sector.
