Definitive Guide to Hiring in Kuwait

Hiring in Kuwait

Hiring employees compliantly in Kuwait means doing it yourself or using an Employer of Record like Global Expansion. You should be careful using independent contractor agreements in Kuwait so that you don’t run afoul of employment laws. To hire an employee compliantly and offer them mandatory benefits and compliant agreements, you can:

(a) Establish your own new legal entity, banking, accounting and payroll service in Kuwait; or

(b) use an Employer of Record like Global Expansion who can handle all of the details for you.

Labor Laws in Kuwait

Employee Probation Period

• Any probationary period must be specified in the work contract and may not exceed 100 working days

Annual Leave in Kuwait

• Employees in Kuwait are entitled to a 30-day annual leave with pay.
• However, this can only be availed until he/she has rendered at least 9 months of continuous service under one employer.

Holidays in Kuwait

Workers are entitled to paid holidays during Festival (public and religious) holidays. These include memorial holidays and religious holidays (Christian origin).

Here is the full list of public holidays in Kuwait:

Maternity Leave Kuwait

• Female employees are entitled to 30 days of maternity leave before the expected due date and 40 days after the birth of the child.
• Pregnant women are also entitled to take 100 days of leave, consecutive or not, after the maternity leave, but they are not eligible for pay and must present a medical certificate as proof that they are unable to work.

Paternity Leave Kuwait

• There is no statutory paternity leave.

Sick Leave in Kuwait

• For employees who have been with their organization for under five years, they are entitled to 15 days’ compensation for each year completed.
• For employees who have over five years with their employer, they are entitled to 30 days’ compensation for each year worked.
• For piece-rate workers and those paid on an hourly, daily or weekly basis, the indemnity is 10-day remuneration for each complete year of service for the first 05 years, and 15-day pay for each complete year beyond 05 years.

Working Hours in Kuwait

• In Kuwait, the working week is generally 40 to 48 hours, although in Ramadan the work day is reduced to six hours.
• Some companies only reduce the hours for Muslims, but legally it applies to all employees.
• Fridays are the rest day. International companies generally have Saturdays off as well, but local companies are more likely to have Thursdays off.

Overtime in Kuwait

• An employer may require his employees to render work overtime provided that it is needed and it has a written agreement or order.
• Below is the list of the overtime rates of pay:
  • 1.25 times the basic hourly rate for excess hours worked on regular working days
  • 1.50 times the basic hourly rate for all hours worked on the weekly day off
  • Twice the basic hourly rate for all hours worked on public holidays
• Overtime is only limited to 2 hours a day, 6 hours per week and 180 hours a year and should not exceed 90 days in a year.

Termination of Employment in Kuwait

• Under indefinite period employment contracts under which the employee is paid on a monthly basis, both the employer and employee have the right to terminate the contract with three months of advance notice.
• If the employer or employee wishes to terminate in advance of the required three-month notice period, then the party wishing to terminate must pay the other party a compensation for the notification period equal to the remuneration of the employee for the same period.
• When the employer gives notice, the employee has the right to take 8 hours paid leave per week during the notice period to search for other work.
• The employer may exempt the employee from working during the notice period, but the employee is still entitled to count the notice period within the period of service for purposes of calculating any amounts due.
• The worker who terminates his work contract shall be entitled to an end of service certificate from the employer stating the duration of his services, his position and the last remuneration he received.
• The employer shall not have the right to include, explicitly or implicitly, any expressions that may harm the employee or limit his employment prospects.

Notice Period in Kuwait

• Under indefinite period employment contracts under which the employee is paid on a monthly basis, both the employer and employee have the right to terminate the contract with three months of advance notice.

Severance in Kuwait

• For employees who have been with their organization for under five years, they are entitled to 15 days’ compensation for each year completed.
• For employees who have over five years with their employer, they are entitled to 30 days’ compensation for each year worked.
• For piece-rate workers and those paid on an hourly, daily or weekly basis, the indemnity is 10-day remuneration for each complete year of service for the first 05 years, and 15-day pay for each complete year beyond 05 years.

Kuwait Salary and Wages

13 / 14th Month Salary in Kuwait

• No
• There is no statutory requirement to pay the 13th or the 14th month salary.
• There is some evidence that some companies may give bonuses and when those are in contracts they will be obliged to pay them out.

• For Kuwaiti employees, contributions are payable monthly by both the employer and employee under the Social Security Law.
• The employer’s contribution is 11.5% and the employee’s is 8% of monthly salary, up to a ceiling of 2,750 Kuwaiti dinars (KWD) per month.
• Benefits provided include pensions on retirement and allowances for disability, sickness, and death.
• In addition to the above contributions, effective 1 January 2015, the employee’s contribution under the Social Security Law will increase by 2.5% of the monthly salary, up to a ceiling of KWD 1,500 per month.
• Currently, there are no social security obligations for expatriate workers in Kuwait.
• However, for such expatriate workers, the Kuwait Labor Law provides for terminal indemnity payments (applicable only to those who have completed three years of their service) calculated at 15 days’ pay-per-year for the first three years of service and 2/3 month’s pay-per-year thereafter.

Immigration Kuwait

• Under Kuwait labor law, work permits are issued by the Public Authority of Manpower.
• As a result of a shortage of qualified Kuwaitis, a large part of the workforce in Kuwait is made up of non-Kuwaiti Arabs, Europeans, Americans and Asians.
• It is expected that the employment of expatriate workers will continue to be essential for the foreseeable future.
• Employers must obtain work permits from the Public Authority of Manpower for foreign, nationals, GCC nationals and Kuwaitis.
• Foreign nationals, other than the GCC nationals, get residency in Kuwait based on the period of the work permit, to take up employment.
• All expatriates must have Kuwaiti sponsors to obtain work permits.
• Work permits are issued by the Public Authority of Manpower after the authority considers various factors, including an employer’s requirement for the labor, the availability of labor in the country and the composition of the population of the country.
• Issuance of work permits is sometimes banned temporarily based on the aforementioned factors.
• It usually takes one month to obtain a work permit if no ban is in effect.
• Work permits must be activated by employees when they arrive to take up residence in Kuwait, with a fee of KWD60, KWD70 or KWD80 for one, two or three years, respectively.
• The permits are valid for a maximum of three years from the date of issuance.
• To obtain a work permit, an employer must submit a copy of the employee’s passport (not less than two years from the expiration date) and signed application form.
• In certain cases, authenticated copies of the educational certificates of the employees must also be submitted.
• After the work permit is issued, it is sent by the employer to the country of origin of the foreign national for presentation at the point of entry into Kuwait.
• The employee must have a work visa to enter Kuwait.
• The employer arranges for the work visa.
• The employee is required to obtain attested copies of his or her university degree and police clearance certificate from his or her country of residence and provide these to the employer after he or she arrives in Kuwait.
• After the employee enters Kuwait on a work visa, the employer will have the work visa converted into a work permit.
• Medical examination is required twice, in the home country of the employee and before getting the residency on the passport.

Value Added Tax (VAT) in Kuwait

• Currently, there is no VAT in Kuwait.
• However, the GCC states have approved a unified customs tariff of 5% on cost, insurance, and freight (CIF) invoice price, subject to certain exceptions.

Mandatory Benefits in Kuwait

• These are mandatory benefits as postulated by law
• These include probationary period, annual leave, public holidays, sick leave, maternity leave, overtime pay, notice period, and severance pay
• Mandatory benefits also include social security benefits.

Payroll Accrual in Kuwait

Country Accruals Additional Information

Description

For Kuwaiti employees, contributions are payable monthly by both the employer and employee under the Social Security Law. The employer’s contribution is 11.5% and the employee’s is 8% of monthly salary, up to a ceiling of 2,750 Kuwaiti dinars (KWD) per month.

Benefits provided include pensions on retirement and allowances for disability, sickness, and death. In addition to the above contributions, effective 1 January 2015, the employee’s contribution under the Social Security Law will increase by 2.5% of the monthly salary, up to a ceiling of KWD 1,500 per month.

Currently, there are no social security obligations for expatriate workers in Kuwait. However, for such expatriate workers, the Kuwait Labour Law provides for terminal indemnity payments (applicable only to those who have completed three years of their service) calculated at 15 days’ pay-per-year for the first three years of service and 2/3 month’s pay-per-year thereafter.

Payroll Accruals Additional Information

Accrued Benefits in Kuwait

Why use Global Expansion to hire in Kuwait

Establishing a branch office or subsidiary in Kuwait can be time-consuming, expensive and complex. With such a robust labor market in place, one must pay great attention to detail when structuring employment because Kuwait labor laws are complex.

The company also has a responsibility to comply with specific employment practices dictated by Kuwait law to maintain its good standing as an equal opportunity employer.

Global Expansion makes it easy for you to expand into Kuwait. We'll help you hire your candidate of choice, handle HR matters and payroll, and ensure that you comply with local laws without the burden of setting up a foreign branch office or subsidiary. In addition, you'll have complete control and direction over your employees.

We enable you to stay in control of everything. Our Kuwait Global Professional Employer Organization (PEO) and Employer of Record (EOR) solution provides you with peace of mind to focus on running your company and the security to enter new markets.