Manama HR guide: Labour Law, LMRA and SIO for small teams

Three offices, three different jobs

The easiest way to keep Bahrain straight is to ask which office is asking. The Labour Law decides what your contract may say and what an employee is owed. LMRA decides whether an expatriate may work for you and whether the wages reached the bank. SIO decides what you owe on top of wages. A late contribution to SIO does not touch your permits, and a clean WPS record does not cover a missed contribution. Keep three separate calendars.

Two details tie them together. Article 20 requires every contract to carry your commercial registration (CR) number, and LMRA's services run against that CR: the absence notification service, for one, says the establishment's CR must be valid. The CR itself comes from the Ministry of Industry and Commerce's Sijilat portal, whose home page offers services to set up, amend, renew and grow a business. The step by step pages there were not readable for us, because they load through scripts, so this page gives no CR fees or timings.

Hiring in Manama: the contract and the permit

Article 19 sets a rule that surprises employers who work in English: the contract is in Arabic, in duplicate, one copy for each side. If you draft it in another language, an Arabic version must come with it. If there is no written contract, the worker alone may prove his rights by any evidence. Article 20 lists what must be in it: names, the CR number, the job, the term if fixed, the wage with the method and time of payment, and every agreed benefit in cash or kind.

Probation is the part to read twice. Article 21 allows up to three months, or up to six for occupations the Minister lists in a resolution, and it counts only if the contract says so. Either side can end the contract during probation with one day of notice. A worker cannot be put on probation twice by the same employer. Article 111 adds that dismissal without cause inside the first three months of an open ended contract carries no compensation, unless the dismissal is unfair under Articles 104 and 105, when it carries one month's wages.

For an expatriate, the permit comes first. LMRA's new work permit service lets an employer request a permit for a worker to be hired on its CR. Its conditions include that any multiple entry permit the worker holds must be cancelled before you apply, and that a worker who fails the medical must be deported at once. Biometric enrolment is a separate step the worker completes in person at an LMRA branch. For companies inside the Bahrainization zone, LMRA also has a workload service to ask for a higher permit ceiling, and it asks for three months of bank statements, photos of the premises and proof of work volume.

Two duties are easy to miss. Article 68 requires a file for every worker, with identity data, job, wage history, leave taken, penalties and the date and reason the service ended, and you keep it for at least two years after the contract ends. Article 55 requires a posted table of each worker's weekly rest day, hours and rest period. HR FLARE has e-signature for sending the Arabic contract once you have it, and recruitment that carries a candidate to a hire record. The permit itself stays in LMRA's systems.

Working time, rest days and Ramadan

Article 53 gives a daily frame that most guides flatten into "8 hours". The standard day is 8 hours unless otherwise agreed, but actual work may not pass 10 hours, the weekly cap of 48 still applies, and the stretch from first start to last finish, breaks included, may not pass 11 hours. Article 52 requires one or more breaks adding up to at least 30 minutes, so that nobody works more than 6 hours in a row, and break time does not count as work.

In Ramadan, Article 51 limits a Muslim worker to 6 hours a day and 36 a week. It does not say the same for a non Muslim colleague on the same team, so a mixed team may run two different clocks for a month. Plan for that before the month starts, not on the first day.

Friday is the default weekly rest day, but Article 57 lets you move it for some workers to another day, as long as Friday prayer is respected for Muslims. Asking someone to work their rest day is allowed "if the situation dictates", and then they get their wage for that day plus 150%, or a day off, as they choose. A worker cannot be required to work more than two rest days in succession without written consent. Overtime under Article 54 pays at least 25% extra by day and 50% extra by night.

In HR FLARE each person plans their own week, so the pattern you post under Article 55 is whatever the team agreed, written down once. Timesheets give the weekly total beside the 48 and 36 hour limits. The product does not work out overtime pay, so read the hours off the timesheet and apply the percentage in your payroll run.

Leave: who decides the dates

Annual leave is 30 days on full pay after a year of service (Article 58). Under a year, the worker earns it in proportion, at two and a half days a month. The worker cannot waive it, but may take cash for part of it under Article 59.

Article 59 is more employer friendly than most Gulf laws. You schedule the dates by business need, and the worker goes when you say. The floor is that each worker gets 15 days of leave with at least six of them in a row. You must settle the leave balance and its pay at least every two years, so a balance cannot sit unused forever. Up to six days a year of emergency leave, at most two days at a time, is allowed and is taken out of the annual leave. A worker sitting an examination can pick the dates with 30 days of notice (Article 61).

Other entitlements a small team will meet:

• Family events: three paid days for the worker's own marriage, once, or a death of a spouse or a relative up to the fourth degree; one paid day for the birth of a child (Article 63).
• Official holidays: a Council of Ministers edict sets them (Article 64). Work on one pays 150% or a substitute day, and a holiday that falls on a Friday earns another day in lieu.
• Maternity: 60 days on full pay with a medical certificate, plus 15 unpaid days on request, and no work in the 40 days after birth (Article 32). Nursing breaks run until the child is one year old (Article 35).
• Hajj: 14 working days on full pay for a Muslim worker after five continuous years, once (Article 67).
• Sick leave: needs a certificate from a government health centre or a clinic you recognise, and unused full and half pay days accumulate up to 240 (Article 65).

A leave request in HR FLARE needs a reason, which suits the proof Article 63 lets you ask for. Because you set the dates, the approval step is where the 15 day and six day minimums are worth checking by hand.

Paying wages: the contract rules and WPS 2.0

Article 40 says wages are paid in Bahraini currency unless a foreign currency is agreed, on a working day, and monthly staff at least once a month. When the employment ends, everything due is paid at once, or within seven days if the worker left on his own initiative. Delay costs 6% a year for up to six months, then 1 point more per month up to 12%. Article 46 says you have not discharged the duty unless the worker signs a payment register or receipt, or you transfer the wage to a bank at his request. Deductions are narrow: a loan repayment may take at most 10% of the wage, or up to 25% for a housing loan the worker agrees to in writing (Article 44), and attachments are capped at 25% (Article 45).

On top of the statute sits LMRA's Wage Protection System. The LMRA pages we read describe version 2.0 as requiring employers to pay through banks and financial institutions that the Central Bank of Bahrain approves and that are registered with LMRA. The flow is specific. The employer registers in WPS through the Expat Management System (EMS), names a Wage Responsible Person, assigns a maker and a checker, keeps each worker's profile and bank or wallet details current, uploads the salary file, and approves it through the bank channel. If the system fails past its service level, LMRA announces a manual channel through the bank's Fawri service, and the month's compliance percentage is not counted.

The LMRA pages we read do not say which establishment sizes are covered. Secondary reports describe a phased rollout by size, ending with small employers in January 2022, but we could not match that to an LMRA page, so confirm your own status in EMS.

HR FLARE keeps payroll records and payslips per month, with the Bahraini dinar as company currency. It does not produce the LMRA salary file for Bahrain, does not connect to EMS, and does not move money. Hold the numbers in HR FLARE, then prepare the file in the format LMRA publishes.

What SIO collects, and from whom

SIO is not one contribution. For a company with both nationals and expatriates there are four streams, and they differ by passport.

• Bahraini workers, old age, disability and death: Law No. 14 of 2022 sets the target shares at 17% of wages for the employer and 7% for the worker. It started the employer at 11% and raises it by one point a year until it reaches the target. Which point the schedule has reached in a given month is on your SIO invoice. Some secondary reports give different figures and a 2028 end date, and we found no SIO text for that, so we do not repeat them.
• Unemployment insurance: in the text SIO publishes of Legislative Decree No. 78 of 2006, the worker pays 1% and the employer 1%, with the Labour Fund paying the employer's share for private sector workers. It covers private sector workers who are covered by employment injury insurance. We did not confirm from a primary page whether expatriates pay it.
• Employment injury: the 1976 Social Insurance Law as published by SIO has the employer alone pay 3% of wages. That text predates later amendments, so confirm the current rate.
• Expatriate end of service: 4.2% for the first three years and 8.4% after, paid by the employer alone. A worker already past three years when the rule began goes straight to 8.4% (Article 13 of the regulation). GCC nationals are excepted, because they come under the unified GCC insurance rules.

Take a worker on BHD 500 a month in the first three years. The employer's end of service contribution is BHD 21 a month, and BHD 42 after that. If the pay rises, the employer also owes the differences (Article 10 of the regulation). When the worker leaves, the reward is worked out on the last wage but cannot exceed what was paid in, and if the wage dropped, the employer may reclaim the difference in contributions.

Timing matters more than most employers expect. Under Article 27 of the Social Insurance Law, contributions are due within the first 15 days of the month after the one they relate to. Interest is 5% of the contributions for each month or part of a month of delay (Article 31), and an employer who does not enrol workers, pays on wrong wages, or does not pay the leaving indemnity owes an extra 20% (Article 29). Those articles are the 1976 text as SIO publishes it, so check for later changes. HR FLARE does not calculate or file any SIO contribution. Your accountant or the SIO employer e-services handle that.

Ending employment

Article 99 gives each side 30 days of written notice, and the contract stays in force during it. If the employer gives notice, the worker may be absent one day a week, or eight hours across the week, to look for another job, and is paid for it. The parties may agree a longer employer notice (Article 99), while an agreement that cuts it short is void (Article 103). Skipping notice costs the wages for the notice period. If you give notice while the worker is on leave, the clock starts the day after the leave ends (Article 102).

Compensation for dismissal without a valid reason is where small employers lose money. After the first three months on an open ended contract, Article 111 sets two days' wages per month of service, at least one month and at most twelve months. For a fixed term contract it is the wages for the rest of the term, and a negotiated lower sum may not fall below three months or the remaining period, whichever is less. If the dismissal is also unfair under Articles 104 and 105, half again is added.

Three limits to know. You may not dismiss someone for illness before their annual and sick leave are used up, and you must tell them 15 days before the last day of that leave (Article 117). You may end the contract without compensation when the worker turns 60, unless agreed otherwise (Article 115). If a worker dies after at least a year of service, the family receives two months of wages (Article 113).

Article 116 gives a leaving indemnity of half a month's wage per year for the first three years and one month after, but only to a worker who is not under the Social Insurance Law. For everyone else the rule above applies. Article 47 bases the indemnity and leave balance on the last basic wage plus any social allowance, so keep that split visible in payroll.

Summer outdoors

A midday ban on outdoor work applies each year. For 2026, a law firm update dated 15 May 2026 says the Minister of Labour banned work in open areas under direct sunlight from 12 noon to 4 pm, from 15 June to 31 August, repealing a 2013 decision. It lists exemptions such as oil and gas, continuous public utilities, security and rescue, and emergency maintenance. We could not open the Official Gazette text or a ministry page, and the update gives no decision number, so confirm the dates each year with the Ministry of Labour.

The Labour Law itself, which we did read, lists heat among the hazards an employer must protect against (Article 166) and punishes violations of that chapter with up to three months in prison and a fine of BHD 500 to BHD 1,000, or either (Article 192). If you run couriers or site crews, schedule the split shift before June, and make the paid hours still add up to a full day.

A word on the flexi permit

You may read that Bahrain has a flexi permit that lets a worker live and work without a sponsor. An immigration law firm alert dated 9 November 2022 says Bahrain stopped accepting flexi permit applications from 18 October 2022 and that holders then needed an employer to sponsor them. The LMRA pages we read describe permits issued to an employer for a worker to be hired on its CR, and none mentions a flexi permit. We could not search LMRA's own site for it, so this is a secondary report. Do not plan a hire around a flexi permit, and ask LMRA directly if a candidate says they hold one.

Absences: keep the evidence

One LMRA service is worth knowing before you need it. An employer may notify LMRA when an expatriate has been absent for 15 days or more without a justified reason. The application asks for proof of the last working days, meaning attendance for the last three months, and proof of salary payment, meaning the last three payslips, plus the contract. The reported worker cannot be transferred to another employer or rehired by you after approval. A time tracking record written on the day, and payslips kept per month, are exactly this evidence.

Manama and Kuwait City are different jobs

If you also run people in Kuwait, do not copy this page across. Bahrain's probation is three months, extendable to six for listed occupations, and either side needs only one day of notice. Kuwait's is 100 working days with no notice. Bahrain's contract notice is 30 days for both sides. The Kuwait guide describes three months for monthly paid staff. Read the Kuwait City guide for that side, and the Doha guide for Qatar.

A yearly checklist for a Manama team

• Every month: approve the salary file through your bank after submitting it in EMS, and pay SIO by the 15th of the following month.
• Each probation: put the end date in the calendar, since one day of notice is all the law asks.
• Every year: check each worker's leave balance against the two year settlement rule and the 15 day minimum.
• Before Ramadan: work out the 6 hour and 36 hour week for Muslim staff.
• Before June: move outdoor work out of 12 noon to 4 pm.
• On exit: pay everything due at once, or within seven days if the worker resigned, and keep the file for two years.

We were unable to open current official pages for the Bahrain Economic Development Board, the Bahrain International Investment Park or the Bahrain Financial Harbour, so this guide says nothing about free zone incentives or office parks. Ask each directly.

What HR FLARE does not do

• No LMRA or WPS file: HR FLARE does not export the Bahrain wage file or connect to EMS. Salaries go through your bank.
• No SIO calculation: contributions for Bahrainis and the expatriate end of service rate are worked out and paid outside HR FLARE.
• No Arabic contract drafting: it sends your contract for signature, it does not write one.
• Data location: data is hosted in Europe; in-country hosting is not available.