Bahrain unveiled a phased system aimed to protect wages of private sector employees, will be rolled out in three phases from May 1.
The kingdom’s Minister of Labour and Social Development Jamil Bin Mohammed had issued a decree specifying dates of the phased system.
Following the Cabinet’s decision to approve the timeline for the implementation of the wage protection system, the Minister of Labour and Social Development, Chairman of the Board of the Labour Market Regulatory Authority, His Excellency Jameel bin Mohammed Ali Humaidan, issued Decision Number 22 for the year 2021 on the timeline of implementation of the wage protection system for workers in the private sector.
The decision aims to ensure the regular and timely transfer of workers’ wages to their bank accounts, in addition to enhancing transparency and oversight. It will also support the judicial authority in settling wage related disputes, and play a key role in mitigating adverse effects on the labour market, most notably irregular work.
The wage protection system will allow employers to maintain a professional and stable work environment by mitigating labor disputes, which will facilitate greater productivity and ensure the continuity of business growth.
Under this decision, the employer is obligated to pay the wages of his employees in accordance with the wages protection system, through any of the payment methods facilitated by entities licensed by the Central Bank of Bahrain.
According to the decree, the employer is committed to regularly paying the employees. The first phase of the system applies on May 1, covering private sector institutions that employ 500 workers or above.
The second phase, taking effect as of September 1, covers employers of 50 up to 449 workers, while the third covering employers of one to 49 workers, will come into effect on January 1 next year.
Employers will be given a six-month grace period with the enforcement of each related phase.
The system will be applied on an optional basis to domestic workers’ employers.
The system aims to guarantee the regular transfer of workers’ wages to their bank accounts in a manner enhancing transparency and oversight as well as supporting the judicial authority in settling wage-related disputes. The arrangement is also hoped to curb illegal labour in Bahrain.
The system is also beneficial to employers as it helps maintain a stable professional environment and business growth.
“This decree comes as part of the Kingdom of Bahrain’s commitments to preserve labour rights in line with the national codes conforming to international labour standards,” Minister Bin Mohammed said. The new system is also designed to support anti-human trafficking efforts, according to him.
The official warned that failure to pay employees on time will be punishable by gradual legal penalties that he did not specify.