HR regulations in Bahrain: a practical guide for employers

The employment relationship in Bahrain's private sector is governed by the Labour Law for the Private Sector, issued by Law No. 36 of 2012 and its amendments. It is supplemented by resolutions on paying wages and on the end-of-service benefit for non-Bahrainis, and by the Personal Data Protection Law, Law No. 30 of 2018.

This guide brings together what employers and human resources (HR) teams need day to day. Every figure in it comes from the official text, and the sources are listed at the end.

Employment contracts: in writing and in Arabic

Article 19 states that "a contract of employment shall be in writing, in Arabic, recorded in duplicate, one copy of which shall be retained by each of the parties". A contract drawn up in another language must have an Arabic version attached. Article 20 requires it to contain the parties' details, the nature of the work and the term of the contract if it is for a fixed term, and "the wage agreed upon, method and time of payment" with the agreed benefits. Breaching either article carries a fine "of no less than two hundred dinars and not exceeding five hundred dinars" (Article 185 as amended by Decree-Law No. 59 of 2018).

Probation (Article 21): it applies only if the contract expressly provides for it, and "the probationary period shall not be more than 3 months". A resolution of the Minister may extend it to six months for certain occupations. It cannot be repeated with the same employer, and either party may end the contract during it with at least one day's notice.

Ending the contract (Articles 99 and 100): either party may end an open-ended contract "upon giving the other party thirty days' prior notice", in writing. A party that does not observe the notice period pays the other the wage for the period or what remains of it.

Working hours and overtime

• Weekly limit: a worker shall not actually be employed "for more than 48 hours in a week" (Article 51).
• Daily limit: eight hours unless otherwise agreed, and actual hours of work "shall not be more than 10 hours a day" (Article 53).
• Rest: one or more breaks totalling at least 30 minutes, so that no one works more than six continuous hours (Article 52), and a weekly rest of at least 24 hours, normally on Friday (Article 57).
• Ramadan: a Muslim worker may not be employed for more than six hours a day or 36 hours a week (Article 51).

For each overtime hour, the worker receives "his wage entitlement increased by a minimum of twenty five percent thereof for hours worked during the day and by a minimum of fifty percent thereof for hours worked during the night" (Article 54). A worker who works on the weekly rest day, or on a public holiday or official occasion, is owed the day's wage plus "an overtime wage equivalent to 150% of such wage", or another day off, as the worker chooses (Articles 57 and 64).

Leave

• Annual leave (Article 58): after a year of service, a worker is entitled to "annual leave on full pay for a period of not less than 30 days at the rate of two and a half days for each month". With less than a year, the leave is pro rata, and it cannot be waived.
• Scheduling and balances (Article 59): the employer sets the dates, but the worker must take 15 days, including at least six consecutive days. The employer settles the leave balance and its pay "every two years as a maximum". If employment ends before the balance is used, the worker is paid for it based on the last basic wage plus the social allowance (Article 47).
• Sick leave (Article 65): after three continuous months of service, with an approved medical certificate: 15 days on full pay, 20 days on half pay and 20 days without pay each year.
• Maternity leave (Article 32): 60 days on full pay, plus an optional 15 days without pay.

Wages and the Wage Protection System

A monthly wage is paid at least once a month. When employment ends, everything due is paid immediately, or "within a period not exceeding 7 days" if the worker left of their own accord. For late wages, the employer compensates the worker "at the rate of 6% per annum" for delays of up to six months, rising by 1% for each month after that "up to a maximum of 12% per annum" (Article 40).

Since Article 46 was amended in 2018, "the employer shall not be discharged from the payment of salary unless he pays it to the worker in accordance with the mechanism specified by a decision of the Minister". That mechanism is the Wage Protection System (WPS):

• The obligation: every employer must pay its workers' wages through the Wage Protection System, using payment methods offered by institutions licensed by the Central Bank of Bahrain, and those institutions report each payment to the Labour Market Regulatory Authority (LMRA) as soon as it is deposited (Resolution No. 68 of 2019).
• The phases: employers with 500 or more workers from 1 May 2021, 50 to 499 from 1 September 2021, and 1 to 49 from 1 January 2022 (Resolution No. 22 of 2021).
• Work permits: a work permit issued to an employer no longer meets one of the conditions for its issue if the employer fails to pay a worker's wages (Resolution No. 2 of 2019).
• Version 2.0: the employer submits the payroll file through the Expat Management System (EMS) and approves it through its banking channel, and appoints a Wage Responsible Person to enter and review the files. Salary transfers must be confirmed every month even when nothing has changed. According to LMRA's guideline (October 2025), mandatory implementation began in January 2026, and from February 2026 employers who do not comply are prevented from submitting transactions to LMRA.

Read more: How to prepare payroll step by step

End-of-service benefit

Article 116 states that "a worker who is not subject to the provisions of the Social Insurance Law shall be entitled upon the termination of his employment to a leaving indemnity at the rate of half month's wage for each of the first three years of employment and one month's wage for each of the following years in service", with fractions of a year paid pro rata. Bahraini workers are covered by social insurance, so in practice the end-of-service benefit (EOSB) is for non-Bahrainis. The text does not tie the benefit to the reason the contract ended, so resignation does not reduce it. It is based on "the worker's most recent basic wage in addition to the social allowance, if any", or on the average of the last three months for piece-rate and commission workers (Article 47). To work it out for one employee, use the Bahrain indemnity calculator.

Since 1 March 2024 the Social Insurance Organization (SIO) has paid the benefit for service from that date, under Prime Minister's Resolution No. 109 of 2023:

• The employer alone pays a monthly contribution of "(4.2%) of the wages for the first three years from the date of commencement of the Insured Person's employment, and (8.4%) of the wages for the subsequent years" (Article 5), and 8.4% from the start for a worker who already had more than three years' service when the scheme began (Article 13).
• The benefit is paid at the same rates "on the basis of the last Remuneration of the Insured Person and not exceeding the amount of the contributions paid on his behalf", and the employer pays the contribution differences when the wage rises (Articles 9 and 10).
• Service before 1 March 2024 remains under the Labour Law, so the employer pays for it (Article 14).

According to LMRA's booklet, the contribution is transferred during the first 15 days of each month, and SIO pays the benefit within 10 working days of the claim.

Worked example: a non-Bahraini worker started on 1 March 2021 and their last working day is 28 February 2027. Their last basic wage plus social allowance is BHD 600:

• Three years before 1 March 2024 at half a month: 3 × 300 = BHD 900, paid by the employer.
• Three years after it at a full month: 3 × 600 = BHD 1,800, paid by SIO up to the contributions paid.
• The total is up to BHD 2,700, and it does not change if the worker resigns.

Read more: How to calculate the end-of-service benefit step by step in Saudi Arabia and Bahrain

Employee data and the Personal Data Protection Law

Law No. 30 of 2018 applies to "every legal person with a place of business in the Kingdom" (Article 2). The points that matter most for HR:

• Grounds for processing (Article 4): processing personal data without the data subject's consent is prohibited unless it is necessary for purposes including the "performance of a contract to which the data subject is a party" or compliance with a legal obligation.
• Sensitive data (Article 5): this includes health, criminal records and union membership, and it may not be processed without consent except where "processing is necessary for the purposes of carrying out the obligations and rights of the data controller, as stipulated by law with respect to those working under his authority in the course of employment". Sick notes are health data.
• Informing employees and access (Articles 17 and 18): employees are told the purposes of processing and who receives their data when it is collected. If an employee asks what data is processed about them, the answer is due free of charge "within a period not exceeding 15 working days".
• Security (Article 8): documented technical and organisational measures. If another party processes the data on your behalf, such as an HR software provider, a written contract must bind it to your instructions and to the same security and confidentiality obligations.
• Penalties (Articles 58 and 59): imprisonment of up to one year and/or a fine of BHD 1,000 to BHD 20,000 for offences including processing sensitive data in breach of Article 5, and up to twice the fine for a legal person.

How Dawmt handles these requirements

Dawmt does not replace professional advice, and legal responsibility stays with the employer, but it organises the data these obligations rest on:

• WPS file: Dawmt exports a WPS file from the payroll register, with its own settings such as the company ID and the payment and debit dates. Submitting and approving the file through LMRA's system and your bank remains a step for your Wage Responsible Person.
• End-of-service benefit: the end-of-service settings ("Indemnity Settings") define the service-year bands and the rate for each band, and the benefit is then added when an employee's service ends. Set them in line with Article 116, and account for the split between service before and after 1 March 2024.
• Attendance and leave: actual working hours, overtime and late arrivals calculated from attendance records, plus leave requests and leave balances.

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Sources

• Labour Law for the Private Sector, Law No. 36 of 2012, Legislation and Legal Opinion Commission (in Arabic)
• Amendments to the Labour Law, including Decree-Law No. 59 of 2018 (Articles 46 and 185) (in Arabic, with English versions)
• Prime Minister's Resolution No. 109 of 2023 issuing the End of Service Gratuity System for non-Bahrainis in the private sector (in Arabic)
• Social Insurance Organization, end of service remuneration for non-Bahrainis
• LMRA, decisions issued to implement the Wage Protection System: Resolution No. 68 of 2019, Resolution No. 2 of 2019 and Resolution No. 22 of 2021 (in Arabic; quoted in our translation)
• LMRA, about the Wage Protection System (WPS) 2.0
• LMRA, Wage Protection Guideline (October 2025)
• LMRA, Wages and indemnity booklet (December 2024)
• Law No. 30 of 2018 issuing the Personal Data Protection Law (in Arabic)
• Personal Data Protection Authority

Quotations from the Labour Law, Decree-Law No. 59 of 2018 and the Personal Data Protection Law follow the English translations published by the Legislation and Legal Opinion Commission, and quotations from Resolution No. 109 of 2023 follow SIO's English text. This information was reviewed in October 2026. Laws and resolutions can change, so check the official source before relying on it.

Disclaimer

This article is general educational content and is not legal advice.