The Wage Protection System in Bahrain is in need of legislative amendments, as highlighted by a recent investigation conducted by Al Ayam newspaper. The report revealed that only 19.7% of small businesses are compliant with the system, which mandates salary transfers through banks. On the other hand, 84.3% of large companies comply with the system. Ahmed Al Saloum, President of the Bahrain Small and Medium Enterprises Development Society, emphasized the need for the system to consider the unique circumstances of SMEs and proposed alternative solutions to help businesses comply with the new regulations.
Shura Council member Nancy Khadouri also advocated for incentives to encourage businesses to comply with the Wage Protection System. While the Ministry of Labour has been taking regulatory measures to motivate businesses to adhere to the system, there is a need for more incentives to ensure higher compliance rates. Lawyer Fatima bin Rajab pointed out that the existing legislation lacks penalties for those who fail to transfer wages to banks, hindering enforcement efforts. She suggested imposing criminal penalties to deter non-compliance.
The investigation uncovered several reasons behind the low compliance rate among small businesses, including renting records to foreigners, trading in visa sales, and exploiting wage support from Tamkeen. Some businesses were found to be manipulating salary amounts to avoid bank transfers. Focus is placed on implementing a specific framework for SMEs that does not equate them with large corporations, taking into account differences in workforce size and responsibilities. The Ministry of Labour is committed to ensuring that workers receive their wages as stipulated in their employment contracts through the Wage Protection System.
In conclusion, there is a pressing need for legislative amendments to the Wage Protection System in Bahrain to increase compliance rates among small businesses. While large companies have shown a higher level of compliance, small businesses face unique challenges that must be addressed in the system. Incentives and penalties are proposed as methods to encourage businesses to adhere to the regulations. The Ministry of Labour and the legislative authority are working towards ensuring that workers receive their wages through bank transfers as required by the system. Moving forward, a comprehensive approach that considers the specific needs of SMEs will be essential to improve compliance rates and protect the rights of workers in Bahrain.
