Qatar’s Wage Protection System causing payment headache for construction sector

Author: PM editorial | Date: 17 Aug 2016

Thousands more workers are getting paid on time but cashflow problems for employers on the rise

The introduction of the Wage Protection System (WPS) has ensured thousands of workers in Qatar get paid on time, but has also caused a payment headache for the construction sector.
More than 1.5 million residents are covered by the WPS, which came into force in November 2015. It requires employers to pay their workers electronically and within seven days of work being carried out.
However, construction companies are finding themselves with an increasing number of late payments coming in from clients, caused by the crash in the oil price, reports the Doha News. Even if the client hasn’t paid a business for the work, the law states it must still pay its employees – regardless of cashflow problems.
“When the contractor runs dry on funds due to payment delays, he doesn’t have any choice in not paying the workers. They simply can’t pay money they don’t have. Bank finances have a limit and wages [are] mostly financed by the project cash flow,” said Zeyad Al Jaidah, managing director of Qatar-based systems integrator TechnoQ.
Late or unpaid wages had long been among the most common complaints among low-income workers in Qatar, even before the oil price slumped.
A shift in the power balance towards the employee will be entrenched when new Qatari residency laws replace the kafala sponsorship system by the end of the year. The reform will give workers the right to leave the country without permission from their employer; if they do so at present, they could face a two-year ban from entering Qatar.
Although the WPS is helping workers get paid on time, is sceptical of how helpful it, and similar laws in Saudi Arabia, really are to workers. It suggests that the US$500-$1,000 fines in KSA for confiscation of passports, overworking employees or denying them access to contracts should be given to the worker rather than collected by the state.
In Saudi Arabia, fines can be imposed on expats who overstay their visas but believes this law is also mismanaged. “Many of those who abscond or overstay their visas do so because of employer misconduct, of which the state is well aware and yet fails to reliably regulate or penalise,” said the migrant rights advocacy website.