Bahrain mulls private sector wage support

21/04/2026 05:49 AST

More than 105,500 Bahraini private-sector workers could have their April salaries paid directly from the Unemployment Fund if a proposal gets approved.

The initiative, costing up to BD100 million, is part of an urgent government-drafted law to be debated in Parliament tomorrow to ease the impact of regional turmoil, said a Gulf Daily News report.

MPs will consider exceptional amendments to Decree-Law No 78 of 2006 on Unemployment Insurance that would allow the fund to be used for a single month - April 2026 - to cover wages up to the insured salary ceiling. The move is being described as a pre-emptive measure aimed at preventing potential layoffs amid growing regional economic pressures.

Parliament's services committee chairman Mamdooh Al Saleh said the draft law turns the unemployment insurance fund into a 'protective shield' rather than a reactive compensation tool.

"Instead of waiting for Bahrainis to lose their jobs and then paying unemployment benefits, we are intervening early to ensure salaries continue and jobs are preserved," he said.

Data presented to MPs by the Social Insurance Organisation (SIO) indicated that 105,503 Bahrainis were registered in the private sector under social insurance as of the third quarter of 2025. The total private-sector Bahraini wage bill per month is estimated at BD94 million.

The current assets of the unemployment insurance account stand at around BD600 million (unaudited 2025 figures).

Finance and National Economy Ministry officials told MPs that the draft law was a direct response to the financial strain facing businesses due to regional conditions that have affected liquidity and operations.

"The objective is to preserve existing labour relationships during exceptional economic circumstances," officials added.

The Labour and Legal Affairs Ministry confirmed that up to 106,000 Bahrainis could fall within the scope of the measure and said labour market indicators would be monitored on a daily basis during implementation.

"Co-ordination between authorities will ensure the support reaches where it is needed while safeguarding public funds," ministry officials said.

The Bahrain Chamber strongly endorsed the draft law during committee discussions, cautioning that many establishments, particularly small and medium-sized enterprises, are struggling to meet payroll commitments, rent and other operational expenses.

"Several sectors are suffering from severe liquidity shortages, and the economic effects may last beyond one month," chamber representatives told MPs.

These concerns prompted some committee members to propose extending similar support into May and June, or alternatively, targeting future assistance to the most affected sectors by covering a defined percentage of wages.

Government officials responded that the situation remains under close review and that additional measures could be considered if circumstances warrant.

Al Saleh stressed that the draft law is constitutionally sound and fully aligns with the purpose of the unemployment insurance system.

"This fund was created for days like these," he said. "We are activating it in its true spirit to prevent unemployment before it happens."

If approved by Parliament and the Shura Council and ratified by His Majesty King Hamad, the law will come into force the day after publication in the Official Gazette.

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