Government Rejects Price Cap on Foreign Worker Recruitment, Unveils Stricter Regulations
TDT | Manama
The Daily Tribune – www.newsofbahrain.com
Email: mail@newsobahrain.com
The government has rejected a parliamentary proposal to cap the fees charged by recruitment agencies for foreign workers, opting instead for a stricter regulatory approach aimed at curbing exploitation and ensuring fair pricing. The move follows growing concerns about escalating costs for citizens seeking domestic help and other foreign workers.
Responding to a Shura Council proposal for a price cap on expat worker recruitment, the government stated in a memorandum that the Labour Market Regulatory Authority (LMRA) will aggressively pursue agencies that inflate prices without justification.
"Agencies must provide detailed justifications for any price increases, facing potential penalties, including license revocation, for unjustified hikes. This increased scrutiny is part of a broader government strategy to enhance transparency and accountability within the recruitment sector," the government stated.
To achieve this, the government is pursuing several key initiatives. It is exploring mandatory regular audits of recruitment agencies' financial statements to assess profit margins and potentially set acceptable profit limits.
Simultaneously, it is actively negotiating agreements with foreign worker source countries to streamline the recruitment process and reduce associated costs, potentially enabling direct hiring and bypassing some agency fees altogether.
"A new online platform, currently under development by the LMRA, will provide real-time monitoring of all recruitment transactions, enhancing oversight and transparency," the government explained.
The government's rejection of a price cap stems from concerns that it would backfire, potentially driving up prices for services currently below the proposed cap and creating a lucrative black market for unregulated recruitment. This, the government argues, would expose citizens to hidden costs and exploitation, while simultaneously limiting the availability of certain nationalities.
Furthermore, a price cap could stifle competition based on service quality, potentially leading agencies to prioritise cheaper nationalities with higher profit margins, ultimately reducing consumer choice.
"The government's focus remains on robust regulation, rather than price controls, to protect citizens while maintaining a competitive and transparent recruitment market," it concluded.
Responding to a Shura Council proposal for a price cap on expat worker recruitment, the government stated in a memorandum that the Labour Market Regulatory Authority (LMRA) will aggressively pursue agencies that inflate prices without justification.
"Agencies must provide detailed justifications for any price increases, facing potential penalties, including license revocation, for unjustified hikes. This increased scrutiny is part of a broader government strategy to enhance transparency and accountability within the recruitment sector," the government stated.
To achieve this, the government is pursuing several key initiatives. It is exploring mandatory regular audits of recruitment agencies' financial statements to assess profit margins and potentially set acceptable profit limits.
Simultaneously, it is actively negotiating agreements with foreign worker source countries to streamline the recruitment process and reduce associated costs, potentially enabling direct hiring and bypassing some agency fees altogether.
"A new online platform, currently under development by the LMRA, will provide real-time monitoring of all recruitment transactions, enhancing oversight and transparency," the government explained.
The government's rejection of a price cap stems from concerns that it would backfire, potentially driving up prices for services currently below the proposed cap and creating a lucrative black market for unregulated recruitment. This, the government argues, would expose citizens to hidden costs and exploitation, while simultaneously limiting the availability of certain nationalities.
Furthermore, a price cap could stifle competition based on service quality, potentially leading agencies to prioritise cheaper nationalities with higher profit margins, ultimately reducing consumer choice.
"The government's focus remains on robust regulation, rather than price controls, to protect citizens while maintaining a competitive and transparent recruitment market," it concluded.
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