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Bahrain implements the second stage of its Wage Protection System

On September 4, 2021

Bahrain’s Labour Market Regulatory Authority (LMRA) recently launched the second phase of its Wage Protection System (WPS). The second phase will cover businesses with 50 to 499 employees. According to the LMRA, around 163,000 workers will be incorporated into the WPS in this phase. 

Bahrain initiated its gradual implementation of the WPS in May this year, after several years of delay. The first phase covered companies with 500 workers or more. The third phase, which is set to begin on 1 January 2022, will cover companies with 1 to 49 workers.

A six-month grace period will be provided to employers to implement the WPS regulations from the start of each respective phase.

According to the Labour Ministry’s Resolution No. (22) for the year 2021, employers are obligated to pay wages using WPS through the payment methods provided by financial institutions authorised by the Central Bank of Bahrain. According to LMRA’s website, the current authorized financial institutions are: Bahrain Financial Company, The National Finance & Exchange Company, Arab Financial Services Company, and Payment International Enterprise.

Domestic workers remain excluded from mandatory WPS regulations. Instead, the LMRA has launched an optional insurance system for the employers which aims to protect employers in the case that their domestic workers abscond or suffer injuries or death. Domestic workers in Bahrain get no insurance against wage theft, a practice not uncommon in the sector. 

Bahrain must include all workers in its WPS and the system must be improved to immediately alert labour officials of non-payment cases. For more on WPS in Bahrain, read our previous report and recommendations.