Qatar – Statutory Change Alert

Deadline for the implementation of the Wages Protections System (WPS) delayed until November 3, 2015.

Executive Summary:

Ministry of Labor in Qatar has delayed the deadline for the implementation of WPS until November 3, 2015. The deadline was extended in order to give the companies more time to develop WPS compliant payroll processes.

Background:

Following suit of the UAE and Kingdom of Saudi Arabia, the State of Qatar is implementing Wages Protection System (WPS) to ensure that salaries paid to private sector employees correspond with the terms of their respective employment contracts. The law introducing the WPS was announced on February 18, 2015 and came into force on May 2, 2015. In accordance with the original law, all employers were required to comply with the new law within six months from the date the law came into force or by no later than October 1, 2015. This deadline has now been extended to November 3, 2015.

The key requirements of the new law are:

• All salaries must be paid through electronic bank transfers using a specific WPS file format
• All salaries must be paid to employees’ bank accounts located in Qatar and in Qatari riyals
• Employees hired based on annual or monthly salaries must be paid at least once a month and all other employees must be paid at least every two weeks.

On February 18, 2015, the State of Qatar issued Law No. (1) of 2015 (“Amendment Law”), which amended the Article 66 of the current Qatari Labor Law – Law No. (14) of 2004.

Under the Amendment Law:

1. Wages and other benefits payable to employees must be paid in Qatari currency;
2. Salaries must be transferred to the employees’ bank account at one of the financial institutions operating in the State of Qatar thus permitting the employees to have access to their wages on the due date;
3. Employees recruited on annual or monthly wages should be paid at least once a month and wages of all other employees should be paid at least once every two weeks.

As per article 1 of the Qatar Central Bank Law 13 of 2012, financial institutions are defined as ‘any bank, insurance company, reinsurance company, investment company, finance company, exchange house, representation office, external unit and other financial institutions’ regulated and licensed by the Qatar Central Bank to conduct such banking and similar activities.

Every person who violates any of the provisions of the amended Article 66 of the Labour Law will be punished by imprisonment for a period not exceeding one month, or a fine of no less than QAR 2,000 ($549) and no more than QAR 6,000 or both.

Please contact your Mercans’ service delivery team for additional information regarding the compliance with WPS regulations in Qatar.