Bahrain’s migrants pay into unemployment funds, but rarely access benefits

Bahrain is the only country in the Gulf that has an unemployment fund which, on paper, extends to migrant workers. Outwardly, the government frequently cites the law as evidence that it champions migrants' rights in the region. But the Ministry of Labour acknowledges that migrant workers' access to social protection is only illusory — infamously “deleting” migrants’ eligibility for the fund in response to citizens' outrage at their inclusion.

According - Opens in new tab to the Labour Market Regulatory Authority, an estimated 55,427 migrant workers lost their jobs between the first quarters of 2020 and 2021. Many of these workers were owed months of due wages and end-of-service benefits. Bahrain has claimed - Opens in new tab that the fund was used to benefit migrant workers impacted by the economic fallout of the Covid-19 pandemic. In reality, the government used about BD320 million from the unemployment fund - Opens in new tab to cover the wages of approximately 100,000 Bahraini workers in the private sector. Migrant workers, on the other hand, were excluded from the wage subsidy programme, leading to massive non-payment issues and thousands of lost jobs. Many of these workers then became irregular, and the target of Bahrain’s arrest and deportation campaigns.

The government could have used the unemployment fund to compensate workers who were victims of wage theft, and later recover the money from their violating employers, but did not. This is especially imperative given that many victims of wage theft work for private companies contracted by the government itself. To put things into perspective, migrant workers from G.P Zachariades, a company whose main client was the government of Bahrain, were owed a total of BD250,000 (US$ 663,144). The workers were stranded for months, choosing to stay back and fight, in the hope of recouping their dues. Most eventually returned home empty-handed. Meanwhile, the SIO estimated - Opens in new tab that the surplus money in the unemployment insurance fund amounted to nearly BD500 million (USD 1.3 billion) as of September 2020.

The unemployment fund has previously been repurposed for other initiatives, such as privatisation efforts. In 2019, in an effort to slash the public sector payroll, the government controversially approved - Opens in new tab the transfer of BD230 million (US$ 610 million) out of the unemployment fund to finance its voluntary retirement scheme (VRS). The VRS allowed Bahraini employees in the public sector to voluntarily retire in exchange for pension, monetary compensation and other benefits. It is estimated that more than 8,000 citizens took part in the scheme.

Ironically, one of the consequences of the VRS – which was partially funded by migrant workers – has been a decline in the government's capacity to inspect and regulate the private sector, including detection of unsafe working conditions and violations against workers.

By design, Bahrain’s unemployment fund is not only exclusionary but extractive. Bahrain should remove administrative obstacles that prevent migrant workers from accessing their entitlements, including by fast-tracking claims and extending the grace period for migrant workers to find new employers. Given their contribution to the unemployment fund, migrant workers should also be included in any initiatives that draw on the fund. Bahrain should not discriminate between nationals’ and migrant workers’ access to social protection.