Wage Protection System in Qatar: What Your Business Needs to Know
Towards the end of 2015, a new Wage Protection System was introduced in Qatar. Helping to protect employees, this new system was initiated by the Ministry of Labour and Social Affairs and Qatar Central Bank, governing the way in which workers receive their pay.
Working to ensure all workers are paid correctly, and in a timely manner, these new requirements bring Qatar into line with other Gulf Cooperation Council countries, including Kuwait, Saudi Arabia and the UAE. But, what do they mean for your business?
The New Requirements
Every employee who holds a current employment contract and a residence permit, work visa or work permit, must be paid from the local bank account of their employer to their own local bank account in Qatar.
In terms of payment timelines, workers employed under annual or monthly employment arrangements must be paid their wages at least monthly. All other workers must be paid at least every two weeks. These wages – and any other amount due – must be paid in Qatari Riyals.
Employees must also receive a soft copy of the monthly salary information file sent to their bank, to keep for their own records.
Why have they been introduced?
So, the main objective of these new regulations is obviously to protect employees. But what else do they have to offer? Let’s take a look at the general objectives of this new system.
- To promote security and stability in Qatar by establishing a safe work environment.
- To reinforce human rights in Qatar.
- To protect labour groups from manipulation of their financial entitlements.
- To save workers and employers from keeping cash in the workplace, which may be exposed to loss or theft.
- To reduce legal disputes between parties.
- To allow the Ministry of Labour and Social Affairs to continuously access worker information, ensuring it complies with the provisions of the Labour Law.
- To assist the judiciary in issuance of rulings and settlement of disputes related to the workers’ entitlements.
Abiding by the Law
As with any Qatari law or procedure, it is essential businesses abide by these new regulations as set out within the Labour Law. Any person found to be violating the provisions of the Labour Law may face a prison term of up to one month, and/or a fine of QAR2,000 to QAR6,000.
It’s also worth bearing in mind that international companies operating within Qatar are required to comply with these new requirements.
Where international companies may have previously paid salaries under an international payroll scheme, with salaries being transferred to employee accounts overseas, this is no longer permitted.
Similarly, Qatari businesses that had an existing salary standing order payment with their banks are required to cancel that standing order. Instead they must pay employee salaries through the WPS by monthly submission in the new salary format.
As these new requirements offer a new level of protection to employees, it makes sense these transactions are documented and monitored.
If the Ministry of Administrative Development, Labor and Social Affairs happens to find any irregularity in company employment and payment data, the company may be blocked.
When a company is blocked, all immigration and Ministry of Labour PRO work has to be put on hold, with possible travel limitations and penalties put into place for authorised signatories.
To unblock a company, it must send a request to the Ministry of Labour and Social Affairs, producing the following documents:
- Letter addressed to the Director of Labour Inspection department requesting the removal of the block, signed and stamped by the authorised signatory.
- List of all the existing and blocked companies and number of employees.
- Copy of the valid Trade License of the blocked company.
- Copy of the valid Commercial Registration, including the main company and branches of the blocked company.
- Copy of the valid Computer Card of the blocked company.
- Copy of the latest electricity and water bill of the blocked company.
- Copy of the acknowledgment of salary payment of the blocked company for the last month.
- Copy of the valid lease contract for the blocked company.
- Transfer of all salaries through the bank, showing proof of the blocked company using the WPS system.
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