In Bahrain, the labor law mandates a set of benefits that employers must provide to their employees. These benefits are designed to ensure a minimum level of security and well-being for the workforce.

Paid Time Off

• Annual Leave: Employees in Bahrain are entitled to a minimum of 30 days of paid annual leave per year, accruing at a rate of 2.5 days per month of service. Employers have the right to decide the timing and duration of the leave, considering work requirements.

• Public Holidays: Employees are entitled to paid leave for all official public holidays observed in Bahrain. The number of public holidays can vary slightly from year to year.

• Sick Leave: Bahraini labor law guarantees sick leave, but the specific details such as duration and pay may be determined by the employment contract or company policy.

• Maternity Leave: Bahraini law mandates 60 days of paid maternity leave for female employees.

End-of-Service Benefits

• Pre-funding for Non-Bahrainis: A recent change (March 1, 2024) requires employers to contribute to the Social Insurance Organization (SIO) for future end-of-service benefits (EOSB) for non-Bahraini employees. The contribution rate is 4.2% of the employee's monthly wage for the first three years and 8.4% thereafter.

• End-of-Service Indemnity: Upon termination of employment, employees are entitled to a lump sum payment as an end-of-service benefit. The specific calculation method for this benefit may be outlined in the employment contract or Bahraini labor law.

Beyond the mandatory benefits mandated by law, employers in Bahrain can offer a variety of additional benefits to enhance their employee value proposition and attract top talent.

Financial Security and Retirement Savings

Employers may offer salary sacrifice schemes or matched savings plans to encourage employees to save for future goals.

Health and Wellness

Employers can provide health insurance plans that go beyond the mandatory coverage, offering benefits like dental and vision care. Employee Assistance Programs (EAPs) offer confidential counseling and support services to employees dealing with personal or work-related challenges. Companies may invest in employee wellness programs that promote healthy lifestyles and well-being, potentially including gym memberships or fitness subsidies.

Work-Life Balance and Family Support

Offering flexible work schedules, remote work options, or compressed workweeks can improve employee work-life balance. Employers may offer financial assistance with childcare costs to help employees manage work and family responsibilities. Some companies offer tuition reimbursement or educational assistance programs to support employees' professional development.

Other Attractive Perks

Providing company cars or transportation allowances can ease employee commutes and attract talent, especially in car-dependent regions. In Bahrain's competitive housing market, some employers may offer housing allowances or subsidized housing options to attract and retain employees. Companies may offer employee discounts on their products or services, fostering a sense of loyalty and additional value.

Bahrain's health insurance landscape is undergoing a significant shift with the implementation of a mandatory health insurance scheme. This program is being implemented in phases. As of January 2023, the program covers Bahraini citizens with the government covering their contributions.

Future Expatriate Coverage

The program is expected to be extended to expatriate workers in the near future. Specific details and timelines are yet to be announced by the authorities.

Current Employer Obligations for Expatriates

Currently, employers in Bahrain are not mandated to provide health insurance for their expatriate employees. However, they may choose to do so as part of their employee benefits package.

Many employers in Bahrain offer health insurance plans as a voluntary benefit to their employees, both Bahraini and expatriate. These employer-sponsored plans can vary in coverage, ranging from basic plans complementing the mandatory scheme to comprehensive plans offering dental, vision, and other benefits.

As the mandatory health insurance program for expatriates rolls out, employers in Bahrain should stay informed about the specific requirements and how they will need to adjust their employee benefit offerings to comply with the regulations.

Bahrain's retirement savings approach is two-pronged.

Social Security Program

All Bahraini citizens employed in the public or private sector are automatically enrolled in the Social Insurance Organization (SIO) program. Employers contribute 14% of the employee's salary, with a planned increase to 20% by 2028. Employees contribute 7% (increasing to 8% in 2023) of their salary, capped at a monthly wage of 4,000 Bahraini dinars. Upon retirement, eligible individuals receive a monthly pension benefit calculated based on their average earnings and contribution period. Reforms are underway to gradually increase the normal retirement age and minimum contribution period for a full pension.

Voluntary Retirement Savings

While the Social Security program provides a baseline level of retirement income, it may not be sufficient to maintain one's pre-retirement standard of living. Some employers in Bahrain offer voluntary participation in private or company-sponsored pension plans. These plans allow employees to save additional funds for retirement beyond the public program. Employees can also choose to invest in individual retirement savings plans offered by financial institutions in Bahrain.

Considerations

Details on employer-sponsored retirement plans can vary greatly depending on the specific company. Employees interested in exploring voluntary retirement savings options should conduct their own research or consult with a financial advisor.

Future Developments

As Bahrain's population ages, there may be a growing emphasis on encouraging voluntary retirement savings to ensure financial security in retirement.