Salary payment through banks is mandatory
Payment of salaries to all employees in the private sector through bank accounts has been made mandatory in the Sultanate with effect from this month.
According to a statement from the Ministry of Manpower, all the companies in the private sector have to use the Wage Protection System (WPS) to pay wages to their employees.
“With effect from November 2017, companies in the Sultanate should ensure that salaries agreed upon in the contract of their employees are paid through bank accounts”, said the statement.
“Managements will have a period of three months to register their companies and comply with the new payment system”, it said.
WPS is an electronic salary transfer system that allows companies in Oman to pay workers’ wages through banks or financial institutions approved and authorised to provide the service.
The programme is jointly implemented by the Ministry of Manpower and the Central Bank of Oman to ensure that private enterprises comply with the Article 53 of Oman’s Labour law.
“’The employer should deposit the salary into the employee’s account at one of the locally approved banks. A decision by the minister may determine the exceptions where the employee’s salary may not be deposited in his account”, Article 53 of the labour law demands.
The new system will now enable the ministry to maintain an accurate database of the all the private sector employees in the Sultanate and make the labour market more transparent.
“This will now help the ministry know a system in the central bank whether the wages are paid on time. This can prevent occurrence of labour disputes and any other issues relating to wages. Apart from protecting employee’s rights prescribed by law to provide them with safe work environment, the new system will strengthen the stability of the national workforce in the private sector enterprises and reduce labour disputes relating to wages,” it said.
The programme will contribute to make wages a priority for employers and protect their right to prove the allegations of employees for not receiving their wages.