At a glance
- A tiered fine system has replaced lump-sum fines for labour breaches.
- Businesses have up to 14 days to address violations before stricter penalties apply.
- The new system aims to keep businesses operational while ensuring legal compliance.
Lump-sum fines for labour breaches have been replaced with a decree-law that reduces penalties by half and grants businesses more time to address violations, as approved by the Shura Council. The change, which passed through parliament at the end of 2024, substitutes immediate BD1,000 fines with an adapted system ranging from BD100 to BD300, allowing firms up to 14 days to rectify expired work permits before stricter penalties are enforced.
The decree-law, issued by the monarch in August last year and now retroactively endorsed by the upper house, took effect the following day. It replaces blanket fines with a tiered system that provides employers more time to correct violations before facing heavier penalties. The overhaul aims to keep businesses operational while ensuring compliance with the law.
The previous rules were considered too rigid, entangling businesses in red tape, and many violations were found to be non-deliberate, often resulting from bureaucratic complexities rather than intentional misconduct. The Chamber of Commerce and Industry had advocated for a revision, highlighting the vulnerability of small businesses under the old rules. The shift is seen as necessary to focus on correction rather than punishment, helping businesses rectify mistakes without being penalised into shutting down. The government's review indicated that many breaches were due to bureaucratic tangles, and the previous system was backfiring, with firms struggling to navigate the process. Excessive paperwork was identified as a significant issue, complicating even basic tasks like permit renewals.
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