April 9, 2021

Bahrain Implements Wage Protection System

Bahrain’s Labor Market Regulatory Authority has announced it will implement a Wage Protection System, requiring private sector employers to pay employee salaries through approved financial agencies, on time and in accordance with their employment contract terms. It will be rolled out over a three-part timetable, with effective dates determined by the size of the employing organization.

The first phase is set to launch on May 1, and all employers are advised to communicate with their financial institutions for specific instructions and requirements. The intent of the new system is three-fold: simplify disbursement processes and procedures, reduce labor complaints and secure stronger rights for both employees and employers by enhancing compliance enforcement. The new system should also help foreign nationals receive their monthly salary payments in a consistent and timely manner.

The implementation schedule is as follows:

May 1, 2021:              Phase 1 for companies with 500 employees or more
September 1, 2021:  Phase 2 for companies with 50-499 employees
January 1, 2022:        Phase 3 for companies with 1-49 employees

Non-compliance with the new Wage Protection System is likely to result in financial penalties and restrictions from using the Labor Market Regulatory Authority’s portal – the system by which companies file and renew work permits.

Joining Oman and Saudi Arabia, Bahrain is the last of the Gulf Cooperation Council member countries to implement the Wage Protection System, which was originally approved in July 2019. As the ripple effects of the pandemic continue to be felt across the global economy, it is expected that additional Middle East countries will implement similar systems to attract multinational employers and foreign business investment.

For further information on the Wage Protection System in Bahrain, please contact the Sterling Lexicon immigration team.

Leanne Cottrell

Leanne Cottrell

As Head of Immigration with Sterling Lexicon, Leanne leads a team of specialists who are responsible for ensuring the entire immigration process is smooth and stress-free for clients, assignees and their accompanying family members. She brings over ten years of experience in strategic immigration management, planning and consultation to her role, and has cultivated invaluable knowledge and experience in processing countless global migration applications. As a trusted partner, she consults with clients on everything from policy considerations and cost or efficiency improvements, to the impact of opening offices in new locations. Leanne is a frequent presenter and author on global immigration topics and trends.

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