Bahrain has made important steps in establishing a strong legal framework to protect the rights of workers while ensuring employers’ obligations. Employees and employers both have their share of responsibilities as per the Bahrain labour law. They have their legal rights too. Observing these regulations ensures the job market is running smoothly.
In this article, we discuss the importance of Bahrain Labour Law. We also cover the topics of salary, working hours, final settlement, terminations and expatriates’ resignations.
Understanding Bahrain Labour Law For Both Employers & Employees
The Bahrain Labour Law clarifies the rights and responsibilities of employees and employers. It provides much-needed support to employees. It also protects the employers against any potential loss occurring because of an employee. Bahrain labour law recognizes the important role both parties play in keeping the job market efficient and the operation of its industry running smoothly.
For Employers
The employer has to provide the employee with the employment contract signed by both parties. It is compulsory to share it in Arabic. It is not a requirement to provide a bilingual contract. However, an employee can request it in a language they understand.
Bahrain Labour Law termination of probation period can take place from either the employer or employee if you decide that the employment is not suitable to continue. One one-day notice period will be given in either case.
It is the employers’ responsibility to pay the wages of employees in their respective bank accounts. Employers should follow the Wages Protection System.
Bahrain Labour Law termination grounds cover conditions of sickness and downsizing. An employer is not allowed to terminate their employee based on sickness. An exception is if the employee has run out of all their sick leaves and continues to be sick. For downsizing, the employer will be notifying the Ministry of Labour thirty days before the employees receive their notice of Bahrain labour law termination.
There are clear Bahrain Labour Law final settlement regulations. For employees, Bahrain labour law termination entitlements include:
End-of-service Certificate
The end-of-service certificate has the employees’ joining date, position, salary and experience. It will share the reason and date of termination too.
Annual Leave Payment
Employer will make payment for annual leaves of employees that have added up.
End-of-service Benefits
Employees will receive an end-of-service benefit. It will be equal to half a month’s salary for the first three years of service. For more than three years of service, it will be a month’s salary for each following year.
For Employees
The employee will be working for a probation period only if it is mentioned clearly in the employment contract. The probation period cannot exceed three months. The employee has the right to terminate the probation period if they do not find it suitable to continue with the employment. They will have to provide a one-day notice period to the employer.
The employee has the right to join established unions and associations. Bahrain Labour law allows the employee to form an association or union of their own. Bahrain labour law working hours are eight hours a day and forty-eight hours a week.
Importance of Labor Law of Bahrain
Bahrain labor laws are critical to ensuring a fair and balanced work environment. They protect the rights of both workers and employers, ensuring that workers have enough benefits, fair remuneration, an appropriate work environment, and legal protection. These rules also safeguard the best interests of employers. Businesses frequently use payroll companies in Bahrain to guarantee seamless compliance with various labour rules. Various organizations specialize in administering payroll, benefits, and other HR-related services.
Employee Protection
The Bahrain labour laws are implemented and enforced to protect the rights of employees. It allows the workers to receive the declared amount of annual leave and have access to sick leaves. It lets the employee enjoy their breaks and rest hours. An off day is entitled to them. Their wages are protected by law. Bahrain Labour Law for Expatriates Resignation ensures fair compensation for foreign talents during their resignation. With Bahrain Labour Law final settlement is easier and prevents unfavorable experiences.
Employer Clarity
Businesses have a clear picture of what their rights and responsibilities towards their employees are. This assists the employer with what is expected of them. It also makes sure that the rights of employers are protected.
Overall Stability
Stability is experienced by everyone all around when their legal rights are protected. Compliance with Bahrain labour law makes sure that the workforce receives a stable income and environment. It makes certain that the employer finds an efficient workforce.
Eligibility Criteria
Being eligible for benefits provided by labour law in Bahrain requires completion of a certain duration of employment. Employees who have worked a year for a company are entitled to thirty days of annual leave. It will be counted as two and a half days each month. Female employees have the right to paid maternity leave of sixty days. They will have to show a medical certificate to claim this leave. If a company has employed a Muslim employee for five continuous years, they are entitled to fourteen days of paid leave to perform Hajj.
Steps in the Payroll Process in Bahrain
There are certain steps you have to follow for the payroll process in Bahrain.
Data Collection
Start by collecting the necessary employee information. This will include the employee’s full name, identity number, details of bank account and contact information. It will also detail the salary structure, allowances and deductions. Check that the data is accurate and complete. This will avoid any errors in calculating the payroll. Gather the records for time and attendance to calculate the adhering to Bahrain labour law salary.
Salary Calculations
Take into account the gross earnings of employees, the basic salary and allowances. Add the overtime pay, commissions and bonuses. Calculate the necessary deductions. This includes social insurance contributions, wage protection system fees and other payroll deductions that might be applicable. Calculate the net salary when you subtract the total deductions from gross salary.
Taxation
Bahrain is a tax-free nation. There are social security contributions though. Make sure you follow the regulations about them.
Payment Processing
Transfer net salary to the bank accounts of your employees through WPS. Provide salary slips to employees. These will have details of their earnings and net pay on them.
Record Keeping
Maintain accurate records of payroll. Keep these records of payroll, salary slips and attendance records for at least three years.
How Payroll is calculated as per Bahrain Labour Law final settlement?
Under Bahrain labour law, you will determine your final settlement by calculating your last final salary, gratuity, annual leave encashment, and other benefits. This will give you the net amount you are to be paid.
Bahrain Labour Law for Notice Period
The law for a notice period usually requires employers and employees to have a notice period of thirty days. Both the employer and the employee are required to provide written notice for terminating the employment contract.
Minimum Notice
The minimum notice period is thirty days. It cannot exceed thirty days unless stated clearly in the contract.
Contractual Notice
It is possible to override the minimum thirty days notice period with a longer one. During the formation process of the employment contract, we are required to make a statement. The contract can be negotiated by us.
How Payroll Middle East Helps You in Payroll as per Bahrain Labour Law?
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