The Kingdom of Bahrain, despite being one of the smallest countries in West Asia, is termed by the World Bank as a high-income economy. Its development is the result of decades of investment in banking and tourism. A large workforce is needed to support the growing Bahraini economy. The robust and comprehensive Bahrain employment law framework exists to ensure equal rights for all workers.
As the economy develops, labour laws also evolve. As the business landscape evolves and the country continues to attract global talent, employers must clearly understand the latest Bahrain labour law.
In this article, we provide an overview of the critical aspects of Bahrain’s employment law as of 2024, covering topics such as minimum wages, leaves, employment contracts, termination, and more.
Table of Contents
Labour Law in Bahrain
Bahrain labour law is called the Labour Law for the Private Sector (Law No. 36 of 2012). It is the primary legislation that all private-sector employers must adhere to as it governs employment relationships in the country.
The law sets out the rights and obligations of both employers and employees, covering various aspects of employment, including:
Minimum Wages
As of 2024, there is no minimum wage requirement for private-sector employers in Bahrain. However, the minimum for Bahraini nationals employed by the government is set to be BHD 300 per month.
In addition, the National Employment and Training Scheme sets the minimum wage for public employees depending on their education qualifications. The set minimum wage requirement based on educational qualification is:
High School Diploma: BD 300 per month
Diploma: BD 380 per month
University Degree: BD 450 per month
Bonuses
No Bahrain labour laws legally oblige employers to provide bonuses to their employees. However, many private-sector employers offer performance-based or annual bonuses as part of their compensation packages. These bonuses can incentivize employees to perform well and contribute to the company’s success. However, at the time of employment, the terms and conditions of any bonus schemes offered should be clearly outlined in the employment contract.
Overtime
Employers can ask employees to work on a rest day or holiday. Employees in Bahrain are entitled to overtime pay for hours on regular work days and holidays. The overtime pay rate is 125% of the employee’s regular hourly wage for working overtime during the day on regular work days. For hours worked on the weekly rest day (typically Friday) or on public holidays and at night on any day, the overtime pay rate increases to 150% of the regular hourly wage.
Leaves and Break Time
Under lmra Bahrain labour law, employees are entitled to several leaves. As an employer, you must offer entitled leave depending on your business. Moreover, all employees must be provided a break of at least an hour for prayer intervals, meal breaks, etc. Employees can only be made to work up to six consecutive hours with a break.
Working Hours
The standard workweek in Bahrain is 48 hours, typically distributed over six days (Sunday to Thursday). Friday and Saturday are considered the weekend, with Friday being the designated weekly rest day.
During Ramadan, working hours are reduced to 36 hours per week to accommodate fasting employees.
Employment Laws Concerning Migrants/Expatriates
Since 79% of the Bahrain workforce comprises expats, employers must know the Bahrain labour law for expatriates. Here are essential labour laws regarding expats to know:
Visa and work permits
Expatriates must obtain a valid work visa and work permit to be legally employed in Bahrain. The employer is responsible for sponsoring the employee’s work visa.
Labour laws for expatriates
Unless immigrants work as domestic workers, civil servants, or in public legal entities subject to the Civil or Military Service Regulations, they are protected by the same labour laws as Bahraini nationals.
In addition, their expatriate workers, regardless of profession, are not covered by any minimum wage regulations under Bahrain labour law.
Expatriate Taxation
Bahrain does not impose personal income tax on expatriates or Bahraini nationals. Non-residents’ capital gains or income are not subject to tax or social insurance in the country.
Recruiting expatriate talent
Employers are mandated to obtain permission from the Labour Market Regulatory Authority (LMRA) when recruiting expatriate workers. Every expat employee must be registered with LMRA. Additionally, employers must obtain work permits for every expatriate employee separately before finalizing their recruitment.
Onboarding Expatriates
For the successful onboarding of expats, employers must ensure that expatriate employees have valid work visas, work permits, and health insurance coverage.
Flexi Permit
The Labour Market Regulatory Authority (LMRA) introduced the Flexi Permit in 2017. It is a unique work permit category that allows expatriates to work for multiple employers without being tied to a single sponsor.
This permit provides greater flexibility and mobility for hiring expatriates, even illegal workers in Bahrain.
Pre-Hire Checks & Criminal Background Checks
Employers must obtain approval from the Bahrain Ministry of Interior and the labour Market Regulatory Authority before hiring anyone on local employee contracts. The level of background checks required for employees will depend on the nationality and position of the individual.
As such, employers in Bahrain are permitted to conduct pre-hire and criminal background checks on potential employees. However, Bahrain employment law requires employers to obtain the necessary information with the candidate’s consent. In addition, employers must comply with data protection laws when handling the personal information of potential employees.
Laws on Labour Unions
Bahrain recognizes the right of workers to form and join trade unions. Trade Unions are permissible under the Bahrain labour laws. The Trade Union Law of 2002 governs the formation, operation, and dissolution of trade unions.
Employers must consult with the labour union if they are retraining employees to work in a different role than they were hired for. Also, employees can strike under the protection of labour unions in defence of their interests.
Laws on Discrimination and Sexual Harassment
Bahrain has strictly prohibited any discrimination or harassment under the labour law. No employee can be discriminated against based on gender, race, language, belief, religion, or disability. The law also prohibits sexual harassment in the workplace and requires employers to take steps to prevent and address such incidents. Furthermore, dismissals based on gender, race, social status, pregnancy, childbirth, or social status will be automatically deemed unfair.
Data Protection and Employee Privacy
Bahrain has stringent protection laws to protect the data and privacy of employees. Data and privacy of the employees are protected under Law No. 30 of 2018 concerning Personal Data Protection (PDPL).
Employers’ collection, processing, and storage of personal data must be only after written employee consent. They must also implement appropriate security measures to protect this data.
Employer Obligations and Responsibilities
Employers in Bahrain have several obligations and responsibilities towards their employees. Labour Laws such as the Private Sector (Law No. 36 of 2012) and other relevant regulations ensure employees’ rights are protected and they are provided a fair working environment.
Work permits and fair job offers
Employers must obtain work permits for their expatriate employees and provide fair and accurate job offers that comply with labour laws.
All permissions must be obtained from the Labour Market Regulatory Authority. The job offers extended to employees must include:
- Employer’s name, address, and trade register number
- Job nature, type, and duration
- Wage, mode, and schedule of payments
- Worker’s name, nationality, occupation, qualifications, address, and other relevant personal information
Health and Safety
Employers are responsible for ensuring their employees a safe and healthy work environment. All employers must ensure their employees’ safety and follow laws laid down under the Occupational Health and Safety (OHS) standards set by the Ministry of Labour and Social Development.
Social Security
Employers must register their Bahraini employees with the Social Insurance Organization (SIO) without failing. Also, employers must make monthly contributions to the SIO for their Bahraini employees.
Payment of wages
Employers must pay their employees’ wages depending on the schedule mentioned in their contract or type of employment. A detailed payslip must also be provided with pay. Payment of wages can be monthly, project-based, or hourly.
Deductions from wages
While there are no mandatory deductions from the wages of expats, employers can make deductions from a Bahraini employee’s wages by the law, such as for social security contributions, income tax (for Bahraini nationals), or court-ordered payments.
Penalties for Employers' Non-Compliance
Employers who violate Bahrain’s labour laws may face penalties, including fines, suspension of work permits, and, in severe cases, imprisonment. The amount or severity of the penalty depends on the nature and extent of the violation.
Private sector employers can face fines ranging from BHD 100 to BHD 500 for each employee affected due to violating Bahrain Labour Laws. For occupational Health and Safety Violations, penalties can range from BHD 200 to BHD 500.
Court Practice & Procedures
A dedicated Labour Case Court handles all employment disputes in Bahrain. Typically, disputes between employers and employees are remedied through a three-stage process:
- Filing of the complaint
- Mediation
- Adjudication
The parties are given a chance to settle the dispute during mediation. If no settlement is reached, the case proceeds to adjudication, where a judge issues a binding decision.
Confidentiality and Non-Compete Clauses
Confidentiality clauses in employment contracts are enforceable under the Bahrain employment law. However, the clauses must be reasonable in scope and duration. Non-compete clauses in Bahrain are also permissible, but they must be limited in time, geographic scope, and the nature of the restricted activities to be considered valid.
Rest Period & Leave Policies
Employers must maintain compliance with the regulations regarding rest periods and leave policies as laid under the Bahrain labour laws. Here are the entitled rest and leave periods.
Public holidays: Bahrain has ten public holidays per year:
- Eid-al-Fitr
- Arafat Day
- Eid-al-Adha
- Islamic New Year
- Ashoora
- Prophet’s Birthday
- National Day
- Sports Day
- Labour Day
- Little Feast
Annual leave: Employees who have completed one year of service are entitled to 30 calendar days of paid annual leave. This leave allowance is in addition to public holidays and weekly rest days.
Sick leave: Employees who have worked for at least three consecutive months for an employer can receive 15 days with full pay, 20 days with half pay, and 20 days without pay. An employer can avail of up to 55 sick leaves annually.
Maternity leave: Female employees are entitled to 60 days of paid maternity leave, to be taken before and after delivery. Employees must present a medical certificate issued by a government health center or clinic recognized by the employer.
In addition to mandatory paid maternity leave, female workers can obtain an additional 15 days of unpaid maternity leave.
Hajj leave: Muslim employees who have completed five years of service with the employer are entitled to 14 days of paid leave for performing the Hajj pilgrimage once during their employment.
Bereavement leave: Employees are entitled to 3 days of paid bereavement leave in the event of the death of a close family member, such as a spouse, parent, child, sibling, or relative of a spouse.
Educational leave: Employees may be granted paid educational leave for pursuing job-related studies or training, subject to the employer’s approval, provided they provide a 30-day notice to the employer for the same.
Contingency leave: Employers must provide employees paid contingency leave for situations such as appearing in court as a witness or performing national service.
Employment Contracts & Agreements
Under Bahrain’s employment law, the employer-employee relationship is described by employment contracts and agreements. They set out the terms and conditions of employment, including the rights and obligations of both parties.
Types of Contracts
- Permanent contracts
Permanent contracts, also known as indefinite-term contracts, are open-ended agreements that do not have a specified end date. It is the most commonly used type of employment contract in Bahrain. A permanent contract provides employees with all the benefits and protections under Bahrain labour law, such as annual leave, sick leave, and end-of-service gratuity.
- Fixed-term contracts
These are the employment contracts with a specified start and end date. Usually, a fixed-term contract can be at most five years. Fixed-term contracts are commonly used for project-based work or for filling temporary vacancies. Termination is automatic after the expiry of the contract unless both parties agree to an extension.
- Part-time contracts
Part-time contracts are agreements where the employee works fewer hours than a full-time employee in a similar role defined by the Labour Law. Such employees are entitled to the same benefits as full-time employees, but on a pro-rata basis, depending on their working hours. For example, if a part-time employee works for 50% of the hours of a full-time employee, they would be entitled to 50% of the annual leave.
- Special contracts
Special contracts, or independent contractor agreements, are used for self-employed individuals who provide services to a company without being an employee. The terms of such a contract clearly outline the scope of work, deliverables, and payment terms.
Probationary period
According to Bahrain employment law, employment contracts may include a probationary period of up to six months. During this period, either party can terminate the contract with one day’s notice.
Notice Period
The notice period for terminating an employment contract in Bahrain depends on the employee’s length of service.
The notice period is one month for employees who have been employed for less than three months. The notice period is two months for those employed between three months and one year. The notice period is three months for employees with more than one year of service.
Gratuity
End-of-service gratuity, also known as severance pay, is a lump-sum payment made to employees upon the termination of their employment contract. Gratuity is calculated based on the length of service and final basic salary. For the first three years, it is 4.2% of the employee’s monthly salary, increasing to 8.4%foreach additional years beyond three years.
Termination of Employment
Grounds for Termination
An employment contract can be terminated for various reasons, including:
- Expiration of a fixed-term contract
- Mutual agreement between the employer and employee
- Employee resignation with proper notice
- Employer termination with valid reason and proper notice
- Summary dismissal for serious misconduct
Notice period
The notice period is one month for employees who have been employed for less than three months. Workers are employed for three months and one year; the notice period is two months. The notice period is three months for employees with more than one year of service.
Severance pay
Employees who are terminated without valid reason are entitled to severance pay in addition to their end-of-service gratuity under Bahrain labour law. The amount of severance pay depends on employment agreement or company policy.
Procedures to follow
Employers must follow proper procedures when terminating an employee:
- Provide written notice to the concerned employee
- Settle the dues owed to employee
- Notify the relevant authorities about the termination of employment.
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Conclusion
Familiarity with Bahrain’s employment law is essential for employers hiring Bahraini or foreign employees. Awareness of your rights and obligations as an employer helps you foster a positive and compliant work environment that attracts and retains top talent.
As the country continues to grow and evolve, employers and employees must keep abreast of any changes in the employment law. Truein can help employers stay compliant with Bahrain labour laws every time.
FAQs
1. What are the standard working hours in Bahrain?
The standard workweek in Bahrain is 48 hours, typically distributed over six days. Unlike in Western economies, the work week is from Sunday to Thursday. Employees are entitled to a one-hour break for every six hours worked, and the maximum daily working hours should not exceed 10 hours. During the holy month of Ramadan, working hours are reduced to 36 hours per week without any reduction in pay to accommodate fasting employees.
2. What rights, including rights to pay and benefits, does a woman have during maternity leave?
Female employees in Bahrain are entitled to the same pay rights and benefits as males for the same work. Additionally, female employees are entitled to 60 days of paid maternity leave, which can be taken before and after delivery. Employers are prohibited from terminating a female employee’s contract due to her pregnancy or maternity leave.
3. What are the rules regarding overtime pay in Bahrain?
Employees in Bahrain are entitled to overtime pay for any hours worked beyond the standard 48-hour work week. The overtime pay rate is 125% of the employee’s regular hourly wage for hours worked on regular working days during the day. For hours worked on the weekly rest day (typically Friday) on public holidays or at night on regular working days, the overtime pay rate increases to 150% of the regular hourly wage.
4. What rights do trade unions have?
Trade unions in Bahrain have several rights under the Trade Union Law of 2002, which aims to promote collective bargaining and protect workers’ interests.
These rights include:
1. The right to negotiate collective bargaining agreements with employers on behalf of their members, covering issues such as wages, benefits, and working conditions.
2. The right to represent employees in disputes with their employers and provide legal assistance and support.
3. The right to organize and participate in strikes to defend workers’ rights.
4. The right to freely elect their representatives and manage their internal affairs without employers or government interference.
5. The right to affiliate with national and international trade union organizations.
