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Bahrain yet again postpones the implementation of Wage-Protection System

On June 12, 2019

Bahrain now expects to implement the Wage Protection System (WPS) in September 2019. The WPS mandates employers to pay wages via bank transfer and will alert the government of delayed or non-payment of wages.

Bahrain had previously planned to launch the WPS in January 2018, then postponed to April 2019. According to officials and media reports, the delays were mainly due to the lack of preparedness by banks and payment service providers to manage the system.

In March 2019 the Shura Council approved decree no.(59) for the year 2018 that amended Bahrain’s 2012 labour law to include article (46) in order to provide a legal framework for the establishment of a WPS.

The implementation of the WPS is planned in different phases. The first phase will cover companies with 500 workers or more, followed by small and medium-sized enterprises and then domestic workers. LMRA’s CEO Ausamah Al Absi said, “this entire process could take over a year until all workers, including domestic workers, are covered under the WPS.” According to the latest available figures from LMRA, as of June 2018 there are only 141 companies in Bahrain that employ 400 workers or more, with most migrant workers working in small and medium-sized enterprises.

Bahrain is the last GCC country to implement this system.  While the WPS is a step in the right direction and could provide greater transparency and stability in wage payments, particularly since many migrant workers do not complain immediately about non-payment and tend to wait several months before filing complaints. However, there remain serious concerns about the efficacy of the system. previously covered how WPS failed to flag non-payment and protect workers against non-payment in the other GCC countries.

Some of the key issues that Bahrain needs to take cognizance of in rolling out WPS are:

  • Will workers receive a pay slip with a breakdown of wages, in order to question unfair deductions if any?
  • What kind of red flag will the system raise on non-payment?
  • And what are the punitive measures in place when employers fail to pay?
  • Is the WPS linked to a fund or bond to cover non-payment?
  • Will WPS include money exchange houses (eg. UAE) or be restricted to banks (eg. Qatar)
  • Are individual employees clients of the financial institutions under WPS, or will it be the employer/company?
  • If latter, how will the government ensure that the privacy and security of salary card and bank accounts of individuals are maintained?