Browsing 'WPS' News

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Neha Rashid / Doha News

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Nearly 40,000 companies in Qatar have adopted the new Wage Protection System (WPS) in the past year, the labor ministry has announced.

This means more than 85 percent of Qatar’s workforce – or some 1.8 million people – are now being paid their salaries electronically, the Government Communications Office said.

However, more than 300,000 salaried employees continue to wait for WPS to be implemented at their companies.

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Omar Chatriwala / Doha News

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Many of them have previously said they can’t afford to comply with the law.

But according to the labor ministry, these 6,700 firms are expected to adopt the system soon, with pressure from government inspectors.

Paper trail

Qatar’s Emir signed WPS into law in February 2015, and it came into effect in November of that year.

The move was designed to address a long-standing complaint among low-income workers in Qatar about late or unpaid wages.

In a statement marking the one-year anniversary of WPS, Minister of Administrative Development, Labor & Social Affairs Dr. Issa bin Saad Al-Jafali Al-Nuaimi said:

“Throughout the world, some employers use cash-in-hand payment to exploit low-income workers.

Through the implementation of the Wage Protection System, Qatar has introduced a paper trail that ensures greater transparency and greater protections for workers at risk of being cheated out of full financial compensation for their efforts.”

According to the labor ministry, some 385 violations have so far been issued against companies that have adopted WPS, but failed to pay salaries on time.

Penalties include fines of QR2,000 to QR6,000, and up to one month in jail.

Additionally, labor complaints have dropped in the past several months, compared to last year.

Cash crunch

However, contractors have said the implementation of WPS brings to light a longstanding payment crisis across the country.

For WPS to truly work, clients need to pay companies on time before they can in turn pay their staff, some managers told Doha News this summer.

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Business2community.com

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The current system can be improved by getting both parties to adhere to internationally certified contracts, one entrepreneur suggested.

Another businessman urged the government to impose strict legal penalties on clients who delay payments.

Thoughts?

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Chantelle D'mello

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Indian community leaders have stepped in to help hundreds of people in Qatar who have not been paid their salaries for months.

The cases come despite the rollout of the Wage Protection System (WPS) in November, which has made it more difficult for companies to skip or delay paying wages.

The construction and office staff in question work for UAE-based group ETA in its Doha office.

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Rosepinkqatar/Flickr

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Speaking to Doha News, one office staffer there blamed a management change for irregular wages and non-payments.

The new bosses said a lack of money was the problem, added the employee, who asked to remain unnamed.

Survival

Without money, many of the unpaid workers who live in the Industrial Area have been surviving on running credit with their local baqala.

“ETA only provides the accommodation,” an ETA employee told Doha News.

Meanwhile, some employees have left ETA after filing labor disputes with the firm.

Photo for illustrative purposes only.

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Shyam Kumar, an ex-project manager with the company, told Doha News he resigned in February and received three months’ outstanding salary in May, only after filing a court case.

He now has another job offer, but ETA has refused to give him an NOC. The firm has also not yet paid his end-of-service benefits, he added.

On how he has survived for the past six months, Kumar told Doha News:

“I have relocated my family to India and have shifted to a sharing accommodation at Ezdan Village 3 at Wakra.

Right now, I am living off my savings that I had parked back home.”

Seeking help

This week, unpaid employees got in touch with the Indian Community Benevolent Forum (ICBF), which works under the Indian Embassy in Doha.

Arvind Patil, president of ICBF, told Doha News:

“I was approached by one of the unpaid employees of ETA and I have raised the matter with the Indian Embassy and asked the employees to attend the open house that is likely to be held the following weekend.”

ETA’s HR head could not be reached to discuss the case, and the Indian embassy has declined to comment.

But Gulf Times reports that the embassy has summoned the company “more than twice” about non-payment problems.

Embassy of India, Doha's new premises in Onaiza, Doha.

Neha Rashid/Doha News

Embassy of India

“However, the employer has been non-committal on the payment of the arrears,” the newspaper added.

Speaking to AFP earlier this week, Patil said that the ICBF would extend monetary help if fewer people needed help, but that in this instance, it would be “very, very difficult.”

He told Doha News that instead, the ICBF extends material help – mostly via food stuff – collected from its donors.

“Of our total database, some 50 to 100 are active donors who extend help in times of crisis such as this one,” Patil said.

However, he added, “We do not have the space to store food supplies for more than 50 to 60 people at the most, at any given point of time.”

Wage protection system

Under WPS, companies must electronically pay employees’ salaries in a timely manner or face sanctions.

Gulf Times reports that ETA has already been blacklisted for violating WPS terms, meaning it can’t make new hires temporarily.

More than a dozen men wait to use the ATMs at City Center Mall.

Shabina S. Khatri

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But it remains unclear how its workers can claim unpaid wages or how the Qatari courts can help them.

For this reason, many people in Qatar have viewed WPS with skepticism. 

The unpaid ETA employee who spoke to Doha News said:

“I am a victim and have not received my salary for the past three months. If the management comes to know I have spoken to the media, I will be terminated without any reason and will not be paid my end-of-service benefits.”

Thoughts?

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Reem Saad / Doha News

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Qatar’s new Wage Protection System (WPS) has helped ensure hundreds of thousands of blue-collar workers are finally getting paid on time.

But it has also brought to light a longstanding payment crisis across the country, contractors said.

For years, finance-related contract disputes have halted work on key projects, as companies faced off with clients on late or non-payments.

This problem has grown acute in recent months as oil prices plummet, making it harder for companies to pay workers via direct bank deposit in a timely fashion, as the new law mandates.

More than a dozen men wait to use the ATMs at City Center Mall.

Shabina S. Khatri

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Speaking to Doha News, Zeyad Al Jaidah, managing director and co-founder of Qatar-based systems integrator TechnoQ, explained:

“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 mostly (are) financed by the project cash flow.”

Lacking cashflow

Qatar’s Emir signed WPS into law in February 2015, and it came into effect in November of that year.

As of June 2016, approximately 1.5 million residents were covered under the system, according to the country’s labor ministry.

But thousands of workers continue to wait for WPS to be implemented at their companies, many of whom have not complied with the law because they can’t afford to.

This is for several reasons, according to Vasanth Kumar, CEO of Qatari contracting company Arabian MEP.

Though he welcomed WPS and pays his employees on time, he told Doha News that some companies are in the red because they expanded too fast without planning for client payment delays.

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Omar Chatriwala / Doha News

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Others have taken on projects at very low prices and are losing money, so they have no cash to pay their bills.

And some firms are struggling after clients postponed contracts that have already been awarded. This leads to loss of revenue for companies and negative cash flow as they hold on to surplus manpower and continue to incur expenses.

According to Kumar, the biggest problem is delayed payments to contractors, which triggers holdups down the chain.

Possible solutions

To resolve some of these issues, Kumar suggested that the client and construction company utilize FIDIC (International Federation of Consulting Engineers) contract forms.

These empower the engineer (or the client representative) to certify completed works onsite on a fair assessment basis and issue payment certificates on time.

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Business2community.com

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However, Al Jaidah said the largest obstacle remains a lack of legal penalties for late payers.

He advocated including fair compensation terms into Qatari law, saying this would be especially helpful for companies contracted by the government.

“All government contracts are totally one-sided with an attitude of ‘take it or leave it,’ ” he said.

Kumar further recommended that the government implement regulations that require funding guarantees.

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George Shahda/Flickr

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This strategy, which has been adopted in the UAE, would help ensure projects are completed as scheduled without any financial issues.

“This takes care of adequate fund flow through the life cycle of any project,” Kumar said.

Finally, the government should publish guidelines outlining the standard minimum rates for different categories of construction.

“This will do away with the current practice of awarding projects simply based on the lowest bid value,” Kumar said.

Unless the issue is tackled, many companies will continue to be unable to afford WPS, and face penalties from the government that could further imperil their business and those who work for them, experts added.

Thoughts?