His Excellency Mr. Jamal Abdulaziz Al-Alawi, the Labor Market Regulatory Authority’s (LMRA) CEO, confirmed that the authority is working on the phased implementation of the wage protection system, which plays a key role in preserving the rights of employers and workers.

Al-Alawi affirmed that the first stage was launched last May, and included employers with 500 workers and more, while the second phase was launched on the first of September for employers with 50 to 499 workers. The CEO added that the third phase will be launched in January 2022, for establishments with 49 employees and less.

Al-Alawi outlined that the wage protection system is linked to the Central Bank of Bahrain (CBB), and various other financial and banking institutions across the Kingdom.  He explained that the aim of the system is to ensure that workers’ wages are transferred to their bank accounts regularly and on set dates, in a manner that enhances transparency and the regulatory process. Al-Alawi added that this supports the settlement of labor disputes related to wages, in addition to contributing to further regulating the labor market.

The CEO pointed out that 100% of the targeted establishments in the first phase of the wage protection system have joined the system, while their commitment to transferring the salaries of their employees through the electronic system exceeded 80%, through various financial and banking institutions and service providers approved by the CBB.

The CEO added that LMRA had earlier announced the implementation of the first phase of the wage protection system last May, based on the Cabinet’s decision regarding the implementation of the wage protection system, and the Minister of Labor and Social Development’s decision No. (22) of 2021 specifying the stages of implementing the system for workers in the private sector establishments.

Al-Alawi also welcomed the fact that more than 87% of the targeted institutions and companies have joined the second phase of the wage protection system to date, after its launch in September. He said that the commitment to pay wages through the system was approximately 61%, explaining LMRA’s commitment to communicate with employers directly and continuously to ensure full compliance with paying the wages of workers registered with them, and to overcome any difficulties that might prevent registration in the system during the set period.

LMRA’s CEO reiterated the safeguards in place in the Kingdom to preserve the rights of expatriate workers and employers in accordance with international legislation and charters, and to preserve the financial rights governed by employment contracts, through the electronic format provided by the system that contributes to strengthening the regulatory process and ensures that employers fulfill their obligations.

Mr. Al-Alawi stated: “The government has been keen to launch the wage protection system project in several stages, in order to facilitate the process of joining the system and work to settle any disputes or labor issues. The system provides the necessary support for business owners and shows sufficient flexibility to ensure sustainability of economic growth, enhance productivity, and guarantee the rights of all parties.”

The CEO commended CBB’s continuous cooperation in easing procedures related to joining the system, including opening accounts for registered workers in different financial institutions without the need to physically attend at the LMRA.