Bahrain’s New Wage Protection System Amongst New Compliance Obligations on Employers

The implementation of wage protections in Bahrain has been the subject of much discussion in recent years, so it was not surprising that Resolution No. 68 of 2019 on the Wage Protection System was passed in 2019. Resolution No. 68 of 2019 requires employers to pay wages in accordance with the new wage protection system through any payment methods of providers authorized by the Central Bank of Bahrain. These authorized providers are required to disclose to the Labour Market Regulatory Authority (LMRA) immediately after the deposit of wages certain information, including the employee’s name, wage amount, date of payment, and the employee and employer’s account numbers. Resolution No. 68 of 2019 is to be implemented in two stages. A second and separate resolution is forthcoming.

New rules on employers have also been introduced by Resolution No. 2 of 2019, which was passed to amend some provisions of Resolution No. 76 of 2008, which deals with compliance with the LMRA. Key changes include a requirement that employers seeking a work permit for a foreign worker must not have a record of having abused their employees or failed to fulfil their rights, including failing to pay wages. Employers also are required to register and update their employees’ data with the LMRA on a regular basis.

The fee imposed on foreign employers for issuing or renewing a permit to practice a professional activity has also been increased to 500 Bahraini Dinars by Resolution No. 3 of 2019, which amended Resolution No. 31 of 2014 regarding fees imposed by the LMRA.

Comment

The final stages of implementation of the new wage protection system are forthcoming. Employers may want to familiarize themselves with the full process once the second resolution is finalized.

Written by Zahir Qayum of Al Tamimi & Co., KSA and Roger James of Ogletree Deakins

© 2020 Al Tamimi & Co., KSA and Ogletree, Deakins, Nash, Smoak & Stewart, P.C.