MPs Approve Lowering Fines for Hiring Expat Workers to BD 100

TDT | Manama

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Employers hiring expat workers without permits are set to see fines reduced from BD 500 to BD 100, after Parliament gave its full backing to new measures on Tuesday. The changes are aimed at easing pressures on small businesses, offering them more time to address issues without the looming threat of heavy legal penalties.

The amendments, introduced through Decree-Law No. 12 of 2024, adjust Article 40 of the Labour Market Regulation Law. A tiered system of penalties will now come into play, starting with a BD 100 fine if breaches are resolved within 10 days of a work permit’s expiry, rising to BD 200 after 20 days and BD 300 after 30 days. Should employers fail to settle matters within a fortnight of detection, cases will move to court, where the minimum fine set by law applies.

MP Maryam Al Dhaen described the decree-law as ‘one of the most important labour reforms of 2024,’ adding that it was widely welcomed by the business community. ‘This law is designed to provide relief to SMEs struggling with the financial burden of fines for work permit violations,’ she said.

Al Dhaen outlined the differences between the new and previous systems, emphasising the fairness of the updated approach. ‘Under the old law, employers were fined BD 1,000 whether they had hired an unlicensed worker or simply failed to renew a permit on time. The new system recognises these differences and allows for reconciliation, offering a fairer and more gradual penalty structure.’

Labour Minister Yousif Khalaf said the reforms strike a balance between enforcement and fairness. ‘The aim is not to burden employers but to create a labour market that operates efficiently and fairly,’ he said.

MP Ahmed Al Salloom praised the reforms, calling them ‘a breath of relief for small businesses’. He added, ‘Small and micro-businesses are the backbone of our economy. Yet many face cash flow issues, and imposing a BD 1,000 fine on a small business can be crushing. This law introduces a level of fairness that was missing in the previous system.’

MP Jalal Kadhem called for further improvements to address labour market inefficiencies. ‘The primary aim should be solving the root problem, not simply raising fines. Harsher penalties do not necessarily deter violations,’ he said. Kadhem argued for targeting individual workers involved in illegal activities rather than penalising employers. ‘Many foreign workers take up jobs outside the establishments they are registered with. The law must hold these individuals accountable instead of placing the entire financial responsibility on employers, many of whom are Bahraini citizens,’ he explained.

Figures from the Labour Market Regulatory Authority reveal the extent of the problem. Cases of unlicensed workers rose from 1,500 in 2022 to over 3,400 in 2023, while employer violations almost doubled, reaching 2,100. By September 2024, another 2,700 cases had been recorded, with fewer than one in five resolved.

The CEO of the Labour Market Regulatory Authority (LMRA), Nebras Talib, said the authority takes the input of MPs and business owners seriously. ‘We carefully consider the proposals put forward by the honourable MPs and employers. Based on their feedback, we continuously review and improve legislation. Once violations are reported, cases are referred to the Public Prosecution for judicial action,’ he explained.

Kadhem also criticised the economic impact of unchecked remittances. ‘These transfers cost the economy billions of dinars each year, weakening our financial stability. It is essential to regulate such transactions through proper documentation and transparency,’ he said.

The reforms also introduce a 14-day reconciliation period for unlicensed workers, during which employers can settle fines of BD 500 before cases are escalated to court. Al Dhaen commended the government for addressing a long-standing issue with a practical solution. ‘While the reforms may not solve every challenge, they are a step in the right direction to sustain SMEs and improve our labour market,’ she said.

With these changes, MPs hope to provide much-needed breathing room for smaller enterprises while addressing the root causes of labour market violations. As Al Salloom put it, ‘These adjustments don’t just keep businesses afloat—they keep people employed.’