Employer of Record Guide in 

Bahrain

Annual Leave

• Entitlement: 30 calendar days per year after completing one year of service
• Accrual: Proportional accrual during the first year
• Carry Forward: Up to 45 days can be carried to the following year
• Cash Out: Unused leave must be paid out upon termination
• Scheduling: Subject to employer approval and business needs

Sick Leave

• Paid Sick Leave: Up to 15 days per year at full pay
• Extended Sick Leave: Additional 20 days at half pay
• Medical Certificate: Required for absences exceeding 3 consecutive days
• Chronic Illness: Special provisions for long-term medical conditions

Maternity Leave

• Duration: 10 weeks (70 calendar days)
• Payment: Full salary during leave period
• Timing: Can be taken before and/or after childbirth
• Job Protection: Guaranteed return to same or equivalent position
• Nursing Breaks: 1 hour daily for nursing mothers for up to 18 months

Paternity Leave

• Duration: 3 days for Bahraini nationals
• Payment: Full salary during leave
• Timing: Must be taken within one month of birth
• Documentation: Birth certificate required

Hajj Leave

• Entitlement: 21 days once during employment for Muslim employees
• Payment: Unpaid leave (may be deducted from annual leave if preferred)
• Eligibility: Available to all Muslim employees regardless of nationality

Bereavement Leave

• Duration: 3 days for immediate family members
• Payment: Full salary
• Extended Family: 1 day for extended family members
• Documentation: Death certificate may be required

Summary

Termination Types

Termination With Cause:

• Immediate dismissal without notice or compensation
• Must involve serious misconduct (fraud, breach of trust, repeated violations)
• Requires proper documentation and investigation

Termination Without Cause:

• Standard business termination
• Requires notice period or payment in lieu
• Employee entitled to end-of-service benefits

Notice Period Requirements

Notice periods vary based on employment duration and contract type:

Note: Employers may provide payment in lieu of notice.

End-of-Service Benefits

All employees are entitled to end-of-service gratuity:

Calculation:

• Years 1-3: 15 days' salary per year
• Years 4-5: 21 days' salary per year
• Years 6+: 30 days' salary per year

Maximum: 18 months' salary Basis: Calculated on basic salary plus allowances

Final Pay Requirements

Employers must settle all dues within 7 days of employment termination:

• Outstanding salary
• Accrued annual leave
• End-of-service gratuity
• Any other contractual benefits

Termination Restrictions

Employees cannot be terminated during:

• Annual leave
• Sick leave (with medical certificate)
• Maternity leave
• Work-related injury recovery

Documentation Requirements

• Termination Letter: Stating reason and effective date
• Work Certificate: Confirming employment period and final position
• Final Settlement: Detailed breakdown of all payments
• Labour Market Regulatory Authority (LMRA) Notification: Required for work permit cancellation

National Holidays

Bahrain observes both Islamic and secular holidays:

Note: Islamic holidays follow the lunar calendar and dates vary each year.

Holiday Pay Rules

• Eligibility: Employees who have completed 3 months of service
• Payment: Full day's salary for each public holiday
• Working on Holidays: 1.5× regular rate plus compensatory day off
• Part-Time Employees: Proportional holiday pay based on working hours

Religious Observances

• Friday Prayers: Muslim employees may take time for Friday prayers
• Ramadan: Reduced working hours for Muslim employees
• Religious Flexibility: Employers generally accommodate religious practices

Required Documents for Employment

From Employee:

• Passport: Valid with appropriate visa
• Work Permit: Issued by LMRA
• Educational Certificates: Attested by relevant authorities
• Experience Certificates: From previous employers
• Medical Certificate: Health clearance from approved medical centres
• No Objection Certificate: If transferring from another employer in Bahrain

Employment Documentation:

• Employment Contract: In Arabic and English
• Job Offer Letter: Detailing terms and conditions
• Company Policies: Employee handbook and procedures

Work Permit Requirements

All non-Bahraini employees require:

• Work Permit: Issued by LMRA before starting work
• Residence Permit: For employees and dependents
• Health Insurance: Mandatory coverage
• Bank Account: Local bank account for salary payments

Language Requirements

• Official Language: Arabic (contracts must be in Arabic)
• Business Language: English widely used in business
• Translation: Important documents may require certified translation

Background Checks

• Police Clearance: Required from home country
• Employment Verification: Previous employer references
• Educational Verification: Degree attestation required
• Medical Clearance: Mandatory health screening

Probationary Period

• Duration: Up to 6 months for new employees
• Terms: Reduced notice period and benefits during probation
• Evaluation: Regular performance reviews recommended
• Confirmation: Written confirmation required after successful completion

Onboarding Timeline

What the EOR Handles

Borderless AI manages:

• LMRA work permit applications
• Employment contract preparation
• Social insurance registration
• Payroll setup and compliance
• Local regulatory filings
• Arabic document preparation

Worker Classification

Bahrain labour law distinguishes between employees and independent contractors:

Employees:

• Subject to Labour Law for Private Sector
• Entitled to statutory benefits and protections
• Employer responsible for social insurance contributions
• Work under direct supervision and control

Independent Contractors:

• Governed by commercial law and contracts
• Responsible for own tax obligations (if any)
• No entitlement to employee benefits
• Greater autonomy in work execution

Note: Misclassification can result in penalties and retroactive benefit payments.

Collective Bargaining

• Trade Unions: Legal and active in various sectors
• Collective Agreements: May override individual contract terms
• Dispute Resolution: Labour disputes handled through Ministry of Labour
• Strike Rights: Limited and regulated by law

Cultural Considerations

Business Culture:

• Relationship-focused: Personal relationships important in business
• Hierarchy: Respect for seniority and authority
• Communication: Indirect communication style preferred
• Punctuality: Expected for business meetings

Religious Considerations:

• Prayer Times: Accommodation for Muslim employees
• Ramadan: Adjusted working hours and cultural sensitivity
• Dress Code: Conservative dress expected in most workplaces
• Gender Considerations: Mixed-gender workplaces are common but cultural sensitivity required

Remote Work

Remote work arrangements are increasingly accepted:

• Legal Framework: No specific remote work legislation
• Contractual Basis: Terms must be clearly defined in employment contracts
• Equipment: Employer typically provides necessary equipment
• Data Security: Compliance with data protection requirements
• Performance Management: Clear KPIs and communication protocols essential

Diversity & Inclusion

Bahrain's workforce is highly diverse:

• Nationality Mix: Large expatriate workforce from various countries
• Gender Equality: Women actively participate in the workforce
• Anti-Discrimination: Legal protections against workplace discrimination
• Accommodation: Reasonable accommodation for disabilities required