Updated on August 25 with statement from UCC
A new system that will make it mandatory for companies in Qatar to pay their workers’ wages directly into bank accounts is not expected to officially come into effect for at least another two months, legal sources have said.
The Wage Protection System, an amendment to Article 66 of Qatar’s Labor Law (No. 14 of 2004), was approved by Qatar’s Emir Sheikh Tamim bin Hamad Al Thani on Feb. 18.
The new system aims to address problems surrounding non- and late payment of wages, particularly for blue-collar workers, by requiring all firms to register their employees’ details with Qatar Central Bank and to pay them at least monthly.
The law states the payment must be paid in Qatari riyals directly into a bank account, or risk penalties of up to one month in prison and a maximum QR6,000 fine.
Timeline confusion
When the Emir approved the law, it was announced that a six-month grace period would be given for companies to comply with the new regulations before it was enforced.
Confusion has surrounded the date of the end of the grace period, with many observers expecting the deadline to expire today (Aug. 18) – six months from when the Emir signed off on the legislation.
However, laws in Qatar are not officially enacted until they are published in the Official Gazette, a document issued monthly in Arabic by the Ministry of Justice.
The relevant Labor Law amendments (Law No. 1 of 2015, an unofficial English translation of which can be found here) concerning the Wage Protection System appeared in the Official Gazette on April 2, law firm Squire Patton Boggs noted in an online client advisory on the issue.
According to this, the deadline for compliance with the new law should be counted six months from then, which would be Oct. 2.
However, the law allows for the grace period to be extended for a further “six months or more,” upon a decision by the Minister for Labor and Social Affairs.
Enforcement
Speaking to Doha News today, a lawyer who works for an international law firm here said that authorities in Qatar are planning to enforce the new legislation from early November.
“The Ministry of Labor and Social Affairs has told us verbally that Nov. 2 will be the date that it (the WPS) starts,” the source said.
It is also understood that banks in Qatar have a similar understanding of this timeline.
Since Qatar won hosting rights to the 2022 World Cup, it has faced significant international scrutiny over the human rights of its blue-collar workforce.
In May last year, authorities promised a series of reforms to the controversial kafala (sponsorship) system, but so far the WPS is the only change to be enshrined in law.
Not being paid on time or at all by their employers are among the top complaints of workers in Qatar.
Electronic salary transfers are one way the nation can tackle these abuses, and human rights’ organizations have been urging Qatar to adopt it.
Implementation of the online wage payment system has been in the works for more than a year, with the draft law approved by the State Cabinet in May last year.
At that time, the plan was to roll out the new system in stages, with phase one for firms with 500 or more employees, phase two for those with 100-500 members of staff and the final stage compliant on companies with fewer than 100 employees.
However, there is no mention of this detail in the published amendments to Article 66 and it is unclear if this will still be the case.
Ready to comply?
As the state’s banking regulator, Qatar Central Bank (QCB) is responsible for creating and handling the new system.
The Ministry of Interior and the Ministry of Labor and Social Affairs – which is the government department responsible for overseeing the recruitment of all non-domestic workers to Qatar – are also involved in the new system.
According to an article on the issue published by local lawyer Ahmed Jaafir of Al Tamimi & Co, QCB contacted all banks in Qatar on Dec. 29, 2014 “instructing them to be ready to receive the wage files of their customers’ workers and process them through the Workers’ Wages Protection System no later than Jan. 15, 2015.”
The Peninsula reports that banks have been told that workers using the new system should be able to withdraw money from their accounts at least five times a month for free, before service charges are imposed.
Some retail banks, such as Commercial Bank, have issued statements announcing their readiness to comply with the new system.
However, it is not known how many companies have so far set up bank accounts for their workers, and if progress to adopt the new system is being monitored by the authorities.
At least one Qatari firm said it has already started paying its workers electronically.
Urbacon Trading & Contracting (UCC) told Doha News in a statement that its workforce has been paid through local bank accounts for the last “several years.”
The company’s CEO, Moataz Al Khayyat, said new employees are put into the system and issued with a debit card. It has a permanent Doha Bank ATM in its workers’ accommodation site and additional mobile ATMs are brought in are when salaries are paid out.
The workers payment protection is essential to ensure that all companies in the country pay their workforce on-time. UCC/KCT (Khayyat Trading & Contracting) supports such initiatives and ensures that its workforce are taken care of in all aspects inclusive of regular and prompt payment,” Al Khayyat added.
Thoughts?