Annual leave and public holidays in Bahrain: a guide for employers.

Who this guide is for

This guide is for owners, office managers and HR staff at private sector companies in Bahrain who manage leave themselves, often in a spreadsheet. It covers employees under the Labour Law for the Private Sector, Law No. 36 of 2012. Government employees follow civil service rules instead, and domestic workers are covered by only some parts of the Labour Law, so check their position separately.

We describe the rules as they are generally understood and applied. The law can be amended, and ministerial decisions add detail, so treat this as a map, not as legal advice. Where a figure matters for a real decision, confirm it with the Ministry of Labour or a qualified adviser.

The basic entitlement

Under the Labour Law, a worker is entitled to paid annual leave of not less than 30 days a year. The law expresses this as building up at the rate of two and a half days for each month of service. Two things follow from that wording:

• It is a minimum. A contract or company policy can give more, never less. If your offer letter promises more days, you are bound by the better promise.
• It accrues monthly. An employee does not wait a full year and then receive 30 days in one go. The balance grows each month, which matters most when someone joins or leaves part way through a year.

Leave is paid at the employee's wage: the employee receives their normal pay for the leave days, as if they had worked. Problems start when companies pay only the basic salary during leave and drop fixed allowances that are part of the agreed wage. Check what your contract defines as the wage and be consistent.

Pro rata balances for part years

Because leave accrues at two and a half days a month, a part year is simple to work out: count the complete months of service and multiply by 2.5. For a part month, many employers count days in proportion (for example 15 days of a 30 day month earns 1.25 days). Whatever method you choose, write it into your leave policy and use it for everyone.

Worked example: how a balance builds up

Take an employee who joins on 1 March on the statutory minimum of 30 days a year.

If the employee took 8 days in August, their balance on 31 December is 25 minus 8, which is 17 days. That one line, days earned minus days taken, is the whole of leave accounting. The difficulty is only ever keeping both numbers accurate.

Calendar days, working days and holidays inside leave

A common source of confusion is whether leave is counted in calendar days or working days, and what happens when a public holiday falls in the middle of someone's leave. The safest approach is:

• Write the counting method into the contract or your leave policy, in plain words, with an example.
• Do not deduct public holidays that fall inside a period of annual leave from the leave balance. The generally accepted reading is that an official holiday is a separate entitlement, not part of annual leave.
• Apply the same method to everyone. Inconsistency is what turns a small difference into a complaint.

Scheduling leave and carrying it over

The employer generally decides when leave is taken, taking account of the needs of the work, and tells the employee the dates in advance. Good companies agree the dates rather than impose them. A few practical rules keep this calm:

1. Ask for requests early. Summer and the Eid periods are popular. A rule such as "requests for July and August by the end of April" avoids a scramble.
2. Approve in writing. A message in a group chat is not a record. An approval in an HR system or a signed form is.
3. Allow splitting. Leave can be taken in parts by agreement, so a two week trip and a few single days can both come from the same balance.
4. Agree carry over rules. Whether unused days can roll into next year, how many, and by when they must be used, should be written down. The law allows leave to be postponed or accumulated by agreement, within limits, so check the current rule before you set a cap.

An employee should not lose a legal entitlement simply because nobody reminded them to use it, and they cannot validly give up their minimum annual leave in exchange for nothing. If someone prefers to keep working, record what was agreed about carrying the days forward.

Paying out unused leave when someone leaves

When employment ends, the employee is entitled to be paid for annual leave they earned but did not take. You need two numbers: the unused balance on the last day and a daily rate. A widely used convention is to divide the monthly wage by 30 to get the daily rate. Some contracts use a different divisor, so follow yours if it says otherwise.

The wage here is only an illustration. The method is what matters: the balance must be correct to the last working day, and the wage must be the same wage you would have paid during leave.

Public holidays

Private sector workers are entitled to paid official holidays, announced by the government. They include fixed date holidays, such as New Year's Day, Labour Day on 1 May and the National Day holidays in December, and holidays that follow the Hijri calendar, such as Eid al-Fitr, Eid al-Adha, the Islamic New Year, Ashura and the Prophet's Birthday.

Because Hijri dates depend on the sighting of the moon, the exact days are often confirmed only shortly before. Put the expected dates in your calendar at the start of the year marked as provisional, then update them the day the official announcement is made.

When a holiday falls on the weekly rest day

If an official holiday falls on an employee's weekly rest day, the law provides for the employee to be compensated, generally with a replacement day off. Check each announcement too, because the government sometimes names the replacement day itself. Confirm the current rule with the Ministry of Labour and apply it the same way for everyone.

When someone works on a public holiday

Some businesses cannot close: hospitals, hotels, restaurants, security, retail. The law allows work on an official holiday, but the worker must be compensated with pay at an increased rate on top of the normal wage, or with another day off, as the law sets out. Confirm the current rate before setting your policy, then write it down so every manager applies it the same way. Keep a record of who worked, on which holiday, for how many hours, and what compensation was given.

Sick leave

Sick leave is a separate balance from annual leave and needs a medical certificate from an approved provider. The Labour Law gives a set number of sick days each year in tiers: a first period on full pay, a second period on half pay and a third period without pay. The tiers are commonly applied as 15 days on full pay, 20 days on half pay and 20 days unpaid, but confirm the current figures with the Ministry of Labour before you rely on them. Track each tier separately so payroll knows exactly which rate to apply in a given month.

Other leave types, briefly

• Maternity leave. Paid leave around childbirth, with an option for further unpaid leave, plus nursing breaks after return.
• Special short leave. Short paid leave for events such as the employee's marriage, the birth of a child and the death of close relatives.
• Hajj leave. A one time paid leave for Hajj after a qualifying period of service.

Each has conditions set in the law. Treat them as separate balances, never take them out of annual leave.

A note on Ramadan hours

During Ramadan, the Labour Law reduces the maximum working hours for Muslim workers (commonly applied as six hours a day and 36 a week). This affects rosters and overtime more than leave, but it is worth noting here because many employers also see more leave requests at the end of Ramadan for Eid. Plan cover early, and remember that hours worked above the reduced limit may count as overtime.

Common mistakes

• No running balance. There is no single figure per employee that both sides agree on.
• Deducting holidays from leave. A public holiday in the middle of a trip is quietly counted as a leave day.
• Paying leave on basic only. Fixed allowances that form part of the wage are dropped for leave days.
• Forgetting leave in the final settlement. End of service is calculated carefully and the unused leave is missed.
• Mixing sick leave into annual leave. Certified sick days are taken from the annual balance instead of the sick leave tiers.

A simple leave record that works

You do not need complex software, but you do need one source of truth. For each employee, keep the start date and contractual entitlement; each approved leave with dates, days and approver; the carried over balance at the start of each year; sick leave by tier and special leave in separate columns; and holidays worked with the compensation given. Once a month, share each person's balance with them. Disagreements found early are cheap to fix.

Frequently asked questions

Is a new employee entitled to leave in their first year?

Leave builds up from the start of employment at two and a half days a month. Some companies ask new staff not to take long leave during probation, which is a scheduling matter, but the days are still being earned.

Can we pay an employee instead of letting them take leave?

Leave exists so people rest. Paying it out while the person is still employed, instead of letting them take it, is risky and can be challenged. Payment in lieu is normally for unused leave at the end of employment.

What if an employee falls sick during annual leave?

A common and fair approach is that a properly certified illness during leave is recorded as sick leave for those days. Write your rule into the leave policy.

Do part time employees get annual leave?

Part time workers generally receive leave in proportion to the time they work. Agree the method in the contract.

Where can I check the current rules?

The Ministry of Labour publishes the Labour Law and related decisions, and the LMRA publishes guidance for employers of foreign workers. When in doubt, ask them directly.

If you would rather have balances, approvals and holiday records kept for you, this is the kind of system we build at RAL; say hello if it would help.

This article is general information, not legal advice. It reflects Bahrain Labour Law No. 36 of 2012 as generally applied; laws and decisions change, so confirm current requirements with the Ministry of Labour, the LMRA or the SIO.