A New Rule About Salary Payments

The new rule

Until recently, salaries and any other sums payable to employees under their contract of employment were paid to an employees' account at a bank agreed by the parties, or to an agent appointed by the employee. However, this is being changed so that payment will have to be made directly from the employer's local Qatari account into a Qatari account in the name of the employee. The new system effectively creates a Qatar to Qatar based transaction between the employer and employee, and applies to employees whose employment is governed by Qatar Labour Law No. 14 of 2004.

What has not changed is that salaries must continue to be paid in Qatari currency, and, if they are employed on an annual or monthly basis, employees must be paid at least once a month and all other employees must be paid at least every two weeks. The material change is that employers will be obliged to transfer salaries directly into employees' Qatari accounts within the designated time periods.

When does it take effect?

This change was originally scheduled to come into force from 18 August 2015, six months after it was first issued on 18 February 2015. However, the date of enforcement has been pushed back to 2 November 2015.

Given that we are in the introductory phase of a new system, we understand that the Labour Department of the Ministry of Labour and Social Affairs will provide sufficient time for those companies that have not yet been able to implement the necessary measures. This goes alongside our understanding that the Labour Department plans to enforce the new rule in various stages, with companies employing five hundred or more employees being the first to come under close scrutiny, followed by companies with between one and five hundred employees and finally companies with one hundred or fewer employees.

Until this change has been fully implemented it is difficult to say with any real certainty how the changes will operate in practice on a day to day basis. However, we would advise all employers to put measures in place to comply with the new rule as soon as practicable and where, for whatever reason they cannot do so, that they open a dialogue with the Labour Department before the threat of penalties is imposed.

The process

The Minister of Labour and Social Affairs recently issued a Decision setting out both the controls and procedures required to apply the new rule which it refers to as the Wages Protection System (WPS).

The WPS's stated aim is to...

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