Bahrainis working in GCC states to contribute 1% toward unemployment insurance

TDT | Manama

Email: mail@newsofbahrain.com

Bahrainis working in other GCC states would pay 1 per cent of their insured wage into unemployment insurance, with employers paying the same, under amendments to the GCC’s unified system for extending social insurance cover that the Shura Council is due to discuss on Sunday.

The change forms part of a draft law attached to Decree No. 38 of 2025 approving a legal instrument to amend parts of the unified system that applies to GCC citizens employed outside their home country in any member state.

Shura Council committees said the move would add an unemployment insurance branch to the scheme and send extra cash into Bahrain’s Unemployment Insurance Account, without having any direct effect on the state budget, either on public revenue or recurrent spending.

Impact

The Financial and Economic Affairs Committee said the main impact would be cash inflows to the Unemployment Insurance Account through deductions from the wages of Bahrainis working across the Gulf.

It described this as positive for the account, while stressing it would not change the budget balance.

The contribution rate is set at 1 per cent from the worker and 1 per cent from the employer, matching the percentage stated in Article 6 of Decree-Law No. 78 of 2006 on unemployment insurance, the committee said.

Representatives of the Social Insurance Organisation told the committee the core new addition was the unemployment insurance branch, while the wider set of amendments aims to update current procedures and improve efficiency, including by strengthening the technical channels used to collect contributions.

Procedures

They said GCC states have followed shared procedures for years, but the amendments seek updated mechanisms and improved collection methods.

They described the registration process under the system. The Gulf employer submits the required documents to the insurance body in the state where the person works.

After the application is reviewed and officially approved, it is sent to the insurance authority in the worker’s home state to complete the remaining steps.

Once final approval is issued, the employer begins deducting the contributions from the employee and transferring them to bank accounts designated for the system.

System

In a letter dated 19 January 2026, the Ministry of Foreign Affairs said the unified system stems from GCC aims of closer co-ordination and integration among member states, and of protecting citizens’ rights after retirement so they receive benefits as if they were in their home countries.

The ministry said this supports social stability for citizens working outside their states and encourages labour mobility within the bloc, citing a decision of the GCC Ministerial Council at its 162nd session on 28 November 2024.

The Bahrain Free Labour Unions Federation (Al Hurr) backed the draft law. The General Federation of Bahrain Trade Unions said it viewed the bill as a positive step that would support workers’ stability and protect their rights.