If there is one thing that businesses are obliged to comply with within their payroll functions, it’s the country’s regulatory framework. Following these payroll compliance standards is essential not only for legal reasons but also to establish an excellent ethical image for the company and develop trust among its stakeholders.
While the payroll regulations vary worldwide, in the Middle East, certain systems are in place to protect the payroll rights of employees and ensure they are paid fairly and duly. Mudad and WPS are two such systems that govern the payroll in the Middle East. They were established to empower and protect the employees’ labour rights.
One common question our clients ask us concerning human resource management is whether we at BSH can support with Mudad and WPS compliance. Here is all you need to know about our take on this and how our services cater to this regulatory demand in the Middle East payroll system.
What Is The Mudad System – KSA
The Mudad System is a digital payroll and compliance system launched by the Ministry of Human Resources and Social Development in the Kingdom of Saudi Arabia. It is designed mainly to monitor payroll violations by employers and allow employees to respond to justifications submitted by employers or companies. It was launched to establish a cloud-based payroll solution that can be used by SMEs to process their payrolls and comply with the country’s wage protection system.
The Mudad system in KSA offers a one-stop-platform for SMEs where they can access a designated platform that has all the needed integrations like the financial institutions, the Ministry of Human Resources and Social Development, the General Organization for Social Insurance, allowing them to manage their payroll function efficiently, effectively and more affordably.
The main features of the Mudad system include compliance, wage protection, and documentation of employee contracts. Wage protection, in particular, is a key service of the Mudad system. It helps small and medium enterprises adhere to the wage protection system by managing monthly payroll processes and sending them to banks from within the system via a special link.
By integrating the Mudad system into the General Organization for Social Insurance (GOSI), updated employee information can also be displayed. Similarly, wage protection data is updated through the integration with the Ministry of Human Resources and Social Development.
What Is The WPS System – UAE
Developed by the UAE central, the WPS (Wage Protection System) allows organizations to pay wages via banks, bureaux de change, and financial institutions that are approved and authorized to provide this particular service. This system effortlessly allows the Ministry of Labor to maintain a database that records and monitors wage payments within the private sector, guaranteeing timely and accurate payment as per their labour agreements.
The WPS UAE covers all institutions registered with the Ministry across all industries and sectors- and will benefit different categories of labour.
Just like the Mudad system in Saudi Arabia, the WPS in UAE ensures employees are promptly paid the right salary. WPS possesses a database where employers in UAE are mandated to upload the salary of their employees for MoHRE and Central Bank to validate this information.
Both the Mudad in the KSA and WPS in UAE are necessary to avoid illegal activities by employers, which include delayed payment of salaries, inappropriate salaries to employees, using illegal sources of funds, etc.
Not only do these unfair practices break the relationship between employees and the organization, but they also harness the Middle East’s reputation as a land of opportunities for career growth.
BSH Support For Mudad & WPS Compliance
At BSH, we believe there is no one-size-fits-all when it comes to Human Resource Management. This applies to the payroll function, which caters to the workforce of an organization.
Especially when it comes to the regulatory frameworks governing the payroll system of each country, the rules are diverse. We have thoroughly acknowledged this standpoint with human resource management and payroll in all our range of services where applicable. This is why we have designed a robust payroll management system that achieves seamless integration and regulatory adherence.
Our expertise in the industry catering to human resource management in the Middle East has allowed us to understand the importance of accurate and duly release of wages beyond regulatory compliances. The relevant wage protection systems in the Middle Eastern countries act as a base to uphold labour rights and ethics and, in general, foster a culture of fairness in the workplace.
Here are the features that allow us to duly support the Mudad-KSA, and WPS-UAE, compliance on behalf of our client company/s.
Alignment with Tax and Social Security Laws
Both our outsourced payroll solutions and cloud-based payroll systems are carefully designed to take into account a given country’s payroll regulations and other social security laws. From the initial setup and execution to ongoing monitoring processes, we ensure our payroll calculations and reporting meet up-to-date regulatory frameworks.
Flexibility in Setup
We believe that an integral part of a good payroll and human resource management system is its flexibility. This includes the ability to adjust the company’s payroll infrastructure and rules concerning them.
Individual pay elements and their associated rules, as well as payroll groups, periods and types, can all be easily set up within the BSH payroll solution. Whether it’s defining individual pay elements or configuring payroll groups, periods, or types, our software empowers users to tailor the system to their specific requirements.
Predefined Allowance Processing Rules
Our outsourced and cloud-based payroll solutions allow us to manage allowances like leaves, overtime, and other benefits entitled to the employee. We can predefine these to the company policies, ensuring accurate calculation and release of payroll in a timely manner while complying with the country’s regulations.
Besides these, we also have a dedicated team that is responsible for keeping up-to-date with relevant Mudad and WPS regulatory changes. This also helps support our clients with their compliance in the most accurate manner, eliminating the risk of penalties and fines.
All our initiatives taken towards human resource management and payroll solutions at BSH focus on one goal, which is to give organizations enough time to focus on core business activities that directly influence growth and profitability. This vision remains the same with our services and systems, which are designed to support our clients with Mudad and WPS compliance in their relevant countries.
