Employment and labor laws vary from country to country. This guide is intended to provide the most up to date information available. We will update this guide as needed when changes are made to the laws.
Employment Contracts
Employers are legally required to provide formal written contracts for all employees that include salary/wage, termination terms, job title, etc. The contracts must be written in Arabic and use the Bahraini Dinar currency (BHD).
Working Hours
The working week in Bahrain tends to vary between 40 and 48 hours depending on company policy. In the month of Ramadan, the working day is reduced to six hours and legally this should apply to all staff, but many companies only apply it to Muslims who fast during daylight hours. Friday is the Muslim rest day, but some companies with a five-day workweek give off either Thursday or Saturday. Saturday is often the most popular choice for international companies as taking Thursday off would mean a reduction in the number of operational days in common with much of the rest of the world. Conversely, other companies insist on Thursday, as the school ‘weekend’ is Thursday and Friday.
Workers are not to be present at the workplace for more than 11 hours per day. This includes working hours plus rest breaks.
Private sector companies can decide whether or not to grant time off during public holidays. If employees work, they have the choice of having another day off in lieu or receiving a payment of 150% salary in addition to their regular salary.
If a public holiday falls on a weekend (i.e. Friday or Saturday) an employer is obliged to provide employees with a day off in lieu.
Overtime
Overtime should not exceed two hours per day. Employees receive their wage plus at least 25 % for each additional working hour for hours worked during the day and at least 50% for hours worked during the night. Overtime pay cannot be included within the annual salary offered in the employment contract.
Senior Managers are exempt from receiving overtime pay.
Public Holidays
The local government decides each year if holidays falling on the weekend are lost or moved to a working day in lieu.
The religious holidays are determined by the lunar cycle and will be confirmed nearer the date of the holiday.
For the year 2024:
- Jan 1: New Year’s Day
- Apr 10: Eid al-Fitr (tentative)
- Apr 11: Eid al-Fitr Holiday (tentative)
- Apr 12: Eid al-Fitr Holiday (tentative)
- May 1: May Day
- Jun 16: Arafat Day (tentative)
- Jun 17: Eid al-Adha (tentative)
- Jun 18: Eid al-Adha Holiday (tentative)
- Jun 19: Eid al-Adha Holiday (tentative)
- Jul 8: Muharram (tentative)
- Jul 18: Ashoora (tentative)
- Aug 8: Ashoora Holiday (tentative)
- Sep 16: The Prophet’s Birthday (tentative)
- Dec 16: National Day
- Dec 17: National Day Holiday
Annual Leave (vacation)
An employee with at least one year of service is entitled to paid annual leave at the regular salary of no less than 30 working paid days at the rate of 2.5 days for each month.
Under the labor law, an employee cannot lose his/her annual leave entitlement as this is a statutory benefit. Accrued but untaken leave must either be carried forward to the next leave year or paid out every two years or upon the termination of employment.
Sick Leave
Employees are not entitled to statutory sick leave once they have completed 3 months’ service and provided they have proven their sickness with a certificate from a medical professional approved by the employer.
Employees are entitled to 55 days of sick leave per year of service thereafter, paid as follows:
- The first 15 days of sick paid at full pay
- The subsequent 20 days of sick paid at half pay
- The next 20 days of sick unpaid
The entitlement of a worker to sick leave on full or half pay may be accumulated for a period not exceeding 240 days.
Maternity and Paternity
Maternity Leave
Pregnant employees receive 75 days of maternity leave. The first 60 days are fully paid, and the last 15 days are unpaid.
Employees are not entitled to statutory sick leave once they have completed 3 months’ service and provided they have proven their sickness with a certificate from a medical professional approved by the employer.
Paternity Leave
Paternity leave entitlement is up to 5 days after the birth, but generally companies offer 1 day of paid paternity leave.
Pateral Leave
Only maternity and paternity leave entitlements are available in Bahrain.
Other Leave
Pilgrimage leave: a Muslim employee with 5 years of consecutive service in employment is entitled to a leave of 14 working days with full pay to perform Hajj once during the period of service provided that the employee has not availed of this leave in any previous employment.
Employee Severance and Terminations
Termination Process
To terminate an employee, an employer must have sufficient grounds for the termination as well as provide a notice period. Reasons for termination often occur:
- To terminate an employee, an employer must have sufficient grounds for the termination as well as provide a notice period. Reasons for termination often occur:
- on the expiry of a fixed-term contract
- dismissal with notice provided it is for a valid reason
- failure to improve performance after reasonable opportunity (i.e., 60 days)
- resignation, incapacity or death, redundancy, retirement (age 60)
- dismissal by reason of any of the grounds listed in Article 107 of the Labor Law
Should an office need to close this must be reported to the Ministry of Labor and Social Development. Bahrain nationals are generally entitled to higher protection from dismissal in such circumstances and may accordingly be awarded higher compensation payments by the authorities.
Notice Period
Should an office need to close this must be reported to the Ministry of Labor and Social Development. Bahrain nationals are generally entitled to higher protection from dismissal in such circumstances and may accordingly be awarded higher compensation payments by the authorities.
If notice is not given, payment in lieu must be made. During the probation period only one week’s notice is required.
Severance Pay
Unless terminated under Article 107 of the Labor Law, employees may be entitled to salary and benefits up to the termination date, notice (or payment in lieu), payment in lieu of accrued but untaken annual leave, an end-of-service gratuity payment (EOSG), and reimbursement of unpaid business expenses.
In case of employer termination, employees are eligible for payment of an EOSG based on the length of service generally calculated at:
- Up to three years’ service at 50% of the regular monthly salary for each year of service
- More than three years’ service at 100% of regular monthly salary for each year of service after three years
The calculation is pro-rated for any fractions of a year of service that have not been completed.
Probation Period
Three months of probation period is common practice, however, this can be increased up to a maximum of six months in respect of certain occupations. During the probation period, one week notice is required.
Payroll Cycle
Salaried employees are paid at least once a month, generally at the end of the month.
13th Salary
Bahrain does not require employers pay 13th salaries.
There is no minimum wage in Bahrain.
Contributions
Employee Income Tax
There is no individual income tax in Bahrain
VISA
In order to live and work in Bahrain, all foreigners must have an employment residency visa issued by the immigration authorities together with a work permit from the Labor Market Regulatory Authority (“LMRA”). Gulf Cooperation Council nationals do not require residency visas but must be registered with the LMRA for work permit purposes.
An employer or Bahraini national needs to sponsor anyone looking to obtain a Bahrain working visa. The number of visas each company can sponsor depends on the size of the company and foreign quotas as stated by national regulations. The employer will need to manage the application process on behalf of the employee and must provide evidence of requirement including: a letter of employment, commercial registration number, the employee’s capacity, the contract duration, completed visa application form, the employee’s passport, and health record from an authorized clinic.
If the employee is in Bahrain at the time of application (on an arrival or business visa), the employment contract must be signed by both parties and stamped by the employer/sponsor. In cases where the employee is outside of Bahrain, there is a requirement for a medical report to be sent over from an LMRA-approved health center in the employee’s home country in addition to the employment contract. A work permit is valid for one to two years.
Effective from 17 February 2023, ‘flexi work permits’ are to be canceled and replaced with professional permits. Employers may no longer engage individuals holding flexi work permits and any such individuals must alternatively register themselves with the new professional permits/labor registration program. Employers should be diligent in ensuring that they do not engage any individuals holding flexi work permits and ensure that any such individuals who are under their employ have registered onto the new professional permits/labor registration program as applicable.
In those countries where people are prohibited from entering the Kingdom of Bahrain, the LMRA regulates and controls work permits.
VAT
The standard rate of VAT in Bahrain is 10%.