Global HR Compliance in Bahrain

Bahrain enforces a formal labour framework under the Labour Law for the Private Sector, with direct application to both local and foreign employees. The regulatory environment is relatively centralised but varies in interpretation, especially around contract classification, termination indemnities, and work permit procedures for expatriates.

Employers operating without a registered entity must structure workforce engagement with care, particularly in relation to contract status, leave entitlements, and employee exit terms.

This guide outlines the statutory requirements governing employment in Bahrain and highlights the legal thresholds for onboarding, payment, and termination. It is designed for global organisations operating in Bahrain without full incorporation, or those reassessing current worker arrangements under local compliance and immigration scrutiny.

Employment Contracts in Bahrain

Employment in Bahrain is governed by the Labour Law for the Private Sector (Law No. 36 of 2012). All employment contracts must be in writing and issued in Arabic, with an English translation if required for clarity. The Arabic version prevails in case of dispute.

Contracts may be concluded for fixed-term or indefinite employment. They must be executed in duplicate, with one copy retained by each party, and include essential terms such as job title, duties, remuneration, working hours, leave entitlements, and termination provisions.

Any contractual clause that conflicts with Bahraini labour law is considered void, even if signed by both parties. An employee may not be re-employed under probation by the same employer more than once.

Written contracts are mandatory for foreign nationals and must be filed through Bahrain’s Labour Market Regulatory Authority (LMRA) to ensure valid work authorisation and compliance with sponsorship rules.

Working Hours

The standard working time in Bahrain is 8 hours per day and 48 hours per week. Employers must provide at least a one-hour rest break after six consecutive working hours. The statutory weekly rest day is Friday, unless otherwise agreed.

During Ramadan, Muslim employees are limited to 6 hours per day and 36 hours per week.

Work performed between 7 p.m. and 7 a.m. is considered night work and may be subject to additional compensation or safety measures under applicable regulations.

Probation Period in Bahrain

A probationary period of up to three months is permitted under Bahraini labour law. This period must be explicitly stated in the employment contract and applies only once per employer–employee relationship.

With prior approval from the Ministry of Labour, probation may be extended to a maximum of six months, typically for technical or specialised roles where longer assessment is justified.

During probation, either party may terminate employment by providing at least one day’s notice.

Annual Leave in Bahrain

Employees in Bahrain are entitled to 30 calendar days of paid annual leave after completing one full year of continuous service. This entitlement accrues at 2.5 days per month, and pro-rata leave applies for employees with less than one year of service.

Annual leave must be scheduled by mutual agreement, taking into account the employer’s operational needs. Employers are required to pay normal wages during the leave period, including any regular allowances.

Hajj Leave

Muslim employees who have completed five consecutive years of service with the same employer are entitled to 14 days of fully paid leave to perform the Hajj pilgrimage. This leave is granted once during the entire period of employment.

Parental and Family Leave in Bahrain

Maternity Leave

Female employees are entitled to 60 days of fully paid maternity leave, consisting of time before and after childbirth. Following this period, an additional 15 days of unpaid leave may be taken if requested.

After returning to work, mothers are entitled to:

• Two one-hour breastfeeding breaks per day until the child reaches six months of age.
• Two half-hour childcare breaks per day until the child reaches one year of age.

These breaks are treated as paid working time, and the employer determines their timing, taking into account operational needs and the employee’s circumstances.

Childcare Leave

Female employees are entitled to unpaid childcare leave of up to six months for each child under the age of six. This leave may be granted up to three times during the course of employment.

Hajj Leave

Muslim employees with at least five years of continuous service are entitled to 14 days of fully paid Hajj leave, granted once during employment.r children under six years of age, granted up to three times during the employment relationship.

Sick Leave in Bahrain

Employees in Bahrain are entitled to 55 days of sick leave per year after completing the probation period. Sick leave is granted on presentation of a medical certificate issued by an approved medical authority.

The entitlement is structured as follows:

• First 15 days: full pay
• Next 20 days: half pay
• Final 20 days: unpaid

An employer may not terminate employment due to illness until the employee has exhausted all sick leave and any remaining annual leave entitlement. If termination is later pursued, the employer must give 15 days’ written notice. Should the employee recover during that notice period, the dismissal must be withdrawn.

Overtime in Bahrain

Overtime in Bahrain must be justified by business necessity and agreed in advance. Working hours beyond the statutory limit are subject to premium pay as defined by the Labour Law.

The standard compensation rates are:

• 125% of basic wage for regular overtime hours.
• 150% of basic wage for night work performed between 7 p.m. and 7 a.m.
• 150% of basic wage or a compensatory day off for work on public holidays or the weekly rest day.

Employees may not be required to work more than two consecutive weekly rest days, and total working hours, including overtime, must not compromise employee health or safety.

Minimum Wage in Bahrain

In practice, many expatriate workers in the private sector earn less than BHD 200 (or lower, depending on job level and nationality), reflecting the absence of a broadly enforced wage floor in private employment.

Bahrain does not have a universal minimum wage for private sector employees. The wage level in private-sector employment is generally determined by mutual agreement between the employer and employee, considering market conditions and job roles.

However, there is a public sector minimum salary for Bahraini nationals: BHD 300 per month.

For certain visa and immigration requirements under the Labour Market Regulatory Authority (LMRA), a minimum salary threshold (often BHD 250) is commonly applied when processing work permits in the private sector.

Termination of Employment in Bahrain

During Probation

Either party may terminate the employment relationship with at least one day’s notice.

Fixed-Term Contracts

A fixed-term contract ends automatically on expiry or completion of the agreed project.
If employment continues beyond the expiry date, the contract converts into an indefinite-term agreement.

Indefinite-Term Contracts

Either party may terminate by giving 30 days’ written notice.
The employer must have a legitimate reason related to performance, conduct, or business requirements.

Compensation Rules

• No compensation is due for termination within the first three months unless the dismissal is arbitrary.
• For unlawful dismissal after three months, compensation equals two days’ wage per month of service, with a minimum of one month’s pay and a maximum of twelve months.
• For early termination of a fixed-term contract, compensation equals the remaining contract period, subject to a minimum of three months’ pay, unless otherwise agreed.
• For early termination of a project-based contract, compensation covers the period required to complete the project, subject to the same minimum.
• Termination at age 60 is permitted without compensation unless otherwise limited by contract or company policy.

HR Compliance Risks to Global Employers in Bahrain

Bahrain’s labour and immigration framework is detailed and closely monitored. The Labour Market Regulatory Authority (LMRA) links employment registration, work permits, and wage reporting under a single system. Employers that fail to align these elements correctly face administrative penalties, suspended licences, or loss of sponsorship rights.

Main Areas of Compliance Risk

• Unregistered employment
  Every worker must be sponsored and registered under the LMRA (Labour Market and Regulatory Authority) before starting work. Hiring without valid authorisation is treated as a violation, even for short-term or project-based assignments.
• Work permit and visa and immigration law violations
  Errors in work permit securing or renewal, worker title classification, or nationality quotas can lead to fines or suspension of new visa approvals. The employer of record bears full responsibility for accuracy.
• Nationalisation (Bahrainisation) targets
  Companies must maintain a prescribed ratio of Bahraini nationals to expatriates, which varies by sector. Falling below the threshold can restrict access to new visas or trigger higher LMRA fees.
• Wage Protection System (WPS) reporting
  All private-sector employers must pay salaries through the WPS and report payment data monthly. Delayed or incomplete submissions can result in automatic licence suspension.
• Termination and dispute management
  Dismissals without documented cause or proper notice are frequently challenged before labour courts. Compensation awards are enforceable, and repeated violations affect future work-permit approvals.
• Permanent establishment risk
  Foreign companies directing staff in Bahrain without a registered entity may create a taxable presence once the new corporate tax regime extends beyond oil and gas.

Hiring in Bahrain with Acumen International

Hiring in Bahrain requires alignment across several tightly linked systems — employment registration, immigration, payroll reporting, and wage protection. Each element is monitored by the Labour Market Regulatory Authority (LMRA), leaving little room for informal or unstructured arrangements.

Acumen International enables global companies to employ people in Bahrain without opening a local entity. Acting as the legal Employer of Record, we take responsibility for employment contracts, payroll, tax contributions, and LMRA filings, ensuring that every hire, local or foreign, is fully compliant from the start.

Our team manages the practical and legal aspects of employing foreign nationals, including work and residence permits, renewals, and coordinated onboarding under Bahraini law. Immigration and employment are handled as a single process, avoiding the disconnect that often leads to compliance breaches.

We also maintain adherence to wage protection and statutory reporting obligations, so your operations continue without administrative disruption or risk of licence suspension. When employment ends, we calculate and execute notice, compensation, and clearance requirements in line with Bahraini labour standards.

For companies entering Bahrain or expanding across the Gulf countries, Acumen provides the structure and accountability needed to operate legally and confidently, giving you direct access to the local workforce while remaining fully compliant under national law.