No to domestic worker fee cap

TDT | Manama

Email: mail@newsofbahrain.com

The government has rejected a proposed cap on domestic worker hiring fees, arguing it could fuel the recruitment black market and disrupt the labour market.

The proposed law, from the Shura Council, would have required the Labour Market Regulatory Authority (LMRA) to set maximum recruitment fees based on nationality and job type. Recruitment agencies would be prohibited from charging employers beyond the approved limit, with extra fees or hidden charges considered unlawful.

The government stated that LMRA is not a price regulator, and the proposal contradicts its intended role. “Setting a maximum fee could push agencies that charge less to increase their rates,” officials said, adding that this would lead to higher costs for citizens. Additionally, it could prompt experienced workers to seek better pay and conditions elsew here.

Risk of Underground Market

There is also concern about an underground market. Agencies might bypass regulations by operating off the books, offering services at reduced prices, or sourcing workers through unauthorized channels.

Competition and Service Quality

The proposal could also stifle competition. With profit margins squeezed, some businesses might turn to cheaper labour markets, reducing service quality and limiting consumer choice.

Government’s Response

In response, the government is developing an electronic platform to monitor agency pricing and recruitment procedures. Agencies will need to justify any fee increases above a certain threshold or risk losing their license. It is also considering requiring regular audited financial records from agencies and working with other countries to reduce recruitment costs and simplify hiring processes.

Existing Regulations Already Address Concerns

The government also noted that parts of the proposed law duplicate existing regulations. Changes to Paragraph (D) of Article (23) mirror provisions already covered by Paragraph (6) of Clause (1) of Article (4), which already prohibit agencies from charging beyond the authorized limit.

Enforcement Challenges

While acknowledging the need for tighter regulation, the government maintains that the proposed law would be difficult to enforce and unlikely to achieve the intended economic or social benefits.