Kuwait employment law: what an employer needs to know
Kuwait's Private Sector Labour Law No. 6 of 2010 sets the minimum terms: probation of up to 100 working days, at least three months' notice for monthly-paid staff, at least 30 working days' paid annual leave, and an end-of-service indemnity of 15 days' pay a year for the first five years and a month's pay a year after that, capped at a year and a half's pay. Staff who resign receive a reduced share until they reach ten years' service.
What Teamed handles in Kuwait
- Written Arabic employment contracts
- Indemnity on the full wage
- PIFSS registration for Kuwaiti staff
Kuwait replaces its 1959 residence law for foreigners
What happened
An Amiri decree issued Decree-Law No. 114 of 2024 on the residence of foreigners, 36 articles in seven chapters replacing Decree No. 17 of 1959. It covers entry and exit, residence permits, deportation and penalties for residency trafficking.
What it means for you
Every expatriate hire in Kuwait depends on a residence permit under the new law. Anyone who employs or houses a foreigner bears the costs of that person's deportation or expulsion.
Dates to know
- 28 November 2024Decree-law issued
- 1 December 2024Published in Kuwait Al-Yawm, Issue 1715
Source: Amiri Diwan, State of Kuwait. We check this page every week. Last checked .
Kuwait's private-sector employment rules sit in Law No. 6 of 2010 concerning Labour in the Private Sector, which replaced Law No. 38 of 1964. It applies to private-sector employees, and to marine and oil-sector work on matters their own laws do not cover or where it is more beneficial to the worker. Domestic workers are excluded and governed separately. Alongside the Labour Law sit the Social Security Law issued by Amiri Order Law No. 61 of 1976, under which PIFSS insures Kuwaiti nationals, Law No. 19 of 2000 on supporting and encouraging the national labour force to work for non-government employers, and Decree-Law No. 114 of 2024 on the residence of foreigners.
What must a Kuwaiti employment contract and probation look like?
The contract must be in writing and in Arabic, made in three copies, and state the start date, wage, nature of work and any fixed term. A fixed term runs for one to five years. Probation can last up to 100 working days, only once per employer, and either side can end it without notice.
An employer that ends the contract during probation still owes the end-of-service indemnity for the time worked. The wage cannot be reduced while the contract runs. See the full guide to Kuwait employment contracts, probation, notice and leave.
How much notice and annual leave are due in Kuwait?
An open-ended contract needs at least three months' written notice for a monthly-paid employee, or pay in lieu. Every employee gets at least 30 working days' paid annual leave a year, earned after six months in the first year, with weekly rest days, official holidays and sick leave not counted.
During employer notice the employee may take one day, or eight hours, a week on full pay to look for work. Leave pay is due before the leave starts, and unused leave is paid in cash when the contract ends. See the full guide to Kuwait employment contracts, probation, notice and leave.
How is the end-of-service indemnity calculated?
For monthly-paid staff, Article 51 gives 15 days' wage for each of the first five years and one month's wage for each year after, capped at one and a half years' wage. It uses the full wage including periodic allowances, and is paid without deducting the employer's social-security contributions. An employee who resigns gets half from three years, two thirds from five years and the full amount from ten.
Staff paid by the day, week, hour or piece receive 10 days' wage a year for five years and 15 days after, capped at a year's wage. Loans the employee owes can be deducted. See the full guide to the Kuwait end-of-service indemnity.
How must salaries be paid in Kuwait?
Monthly-paid staff must be paid at least once a month, in Kuwaiti currency, and no later than seven days after the wage falls due. An employer with at least five workers must pay wages into the workers' accounts at local financial institutions, and the Public Authority for Manpower may ask for the transfer statements.
Deductions for loans owed to the employer are capped at 10% of the wage. See the full guide to Kuwait payroll and social security.
Who is covered by social security, and what about expatriates?
Only Kuwaiti nationals are insured with PIFSS, and the employer pays 10% to the basic fund on salary capped at KD 1,500, plus supplementary, pension increase and unemployment shares. Expatriates are not insured and rely on the end-of-service indemnity. Their residence is governed by Decree-Law No. 114 of 2024, which replaced the 1959 decree.
PIFSS contributions are payable at the start of the following month, with 1% a month added after a default of more than ten days. Anyone who employs or houses a foreigner bears the costs of that person's deportation or expulsion. See the full guide to Kuwait payroll and social security.
What does Kuwaitization require?
Kuwait's policy of placing nationals in private-sector jobs rests on Law No. 19 of 2000 on supporting and encouraging the national labour force to work for non-government employers. The Labour Law itself does not set the share of Kuwaitis an employer must hire.
Confirm the current requirement for your sector with the Public Authority for Manpower before hiring. The Labour Law refers to the social and children's allowances paid to Kuwaiti staff under Law No. 19 of 2000 and keeps them out of the wage used for the indemnity.
Key figures
| Detail | Value |
|---|---|
| Probation, Article 32 | Set in the contract, no more than 100 working days, and only once with the same employer. Either party may end the contract during probation without notice; if the employer ends it, the employee is paid the end-of-service indemnity for the time worked. (source) |
| Notice, Article 44 | For an open-ended contract, written notice of at least three months for a monthly-paid employee. Failing that, the party ending the contract pays the wage for the notice period. During employer notice the employee may take one day, or eight hours, a week on full pay to look for work. (source) |
| End-of-service indemnity, Article 51 | Monthly-paid: 15 days' wage a year for the first five years and one month's wage a year after, capped at one and a half years' wage. Paid by the day, week, hour or piece: 10 days a year for five years and 15 days after, capped at a year's wage. Part years count in proportion. The full indemnity is paid without deducting the employer's social-security contributions. Loans owed to the employer can be deducted. (source) |
| Indemnity on resignation, Article 53 | An employee who resigns from an open-ended contract receives half the indemnity with three to five years' service, two-thirds with five to ten years, and the full indemnity at ten years or more. (source) |
| What counts as wage, Article 55 | The basic salary plus allowances, remunerations, commissions, grants and cash privileges paid periodically, but not the social and children's allowances paid under Law No. 19 of 2000. (source) |
| Annual leave, Article 70 | At least 30 working days' paid annual leave a year. In the first year it is earned only after six months' service. Weekly rest days, official holidays and sick leave within it are not counted, and leave for part years is in proportion. (source) |
| Salary payment, Articles 56 and 57 | Monthly-paid staff are paid at least once a month and no later than the seventh day after the due date. An employer with at least five workers must pay wages into the workers' bank accounts at local financial institutions. The Public Authority for Manpower may ask for copies of the transfer statements. (source) |
| PIFSS covers Kuwaiti nationals | An insured person is every Kuwaiti employee working in any sector, self-employed, working in a GCC state where social security is compulsory, or working abroad where it is optional. (source) |
| PIFSS contribution rates | Basic fund: employee 5%, employer 10% on salary up to KD 1,500. Supplementary: 5% and 10% up to KD 1,250. Pension increase: 2.5% and 1% up to KD 2,750. Unemployment insurance (private and oil sectors): 0.5% each up to KD 2,750. Late payment adds 1% a month. (source) |
| Residence of foreigners, Decree-Law No. 114 of 2024 | 36 articles in seven chapters replacing Decree No. 17 of 1959. Anyone who employs, houses or harbours a foreigner bears the costs of that person's deportation or expulsion. Published in Kuwait Al-Yawm Issue 1715 on 1 December 2024. (source) |
Frequently asked questions
Is the Kuwaiti indemnity paid on basic salary?
No. Article 55 of the Labour Law defines the wage as the basic salary plus allowances, commissions and other cash benefits paid periodically, so the indemnity is usually higher than a basic-pay calculation suggests.
Does an employee who resigns get the full indemnity?
Only after ten years' service. Under Article 53, a resigning employee gets half the indemnity with three to five years' service, two-thirds with five to ten years, and the full amount from ten years.
Can an employer end probation in Kuwait at no cost?
No notice is needed, but if the employer ends the contract during probation it must pay the end-of-service indemnity for the time the employee worked (Article 32).
Do expatriates in Kuwait pay social security?
No. PIFSS insures Kuwaiti nationals. Expatriate employees are protected by the end-of-service indemnity under the Labour Law instead.
Each of the six Gulf states writes its own labour law, its own end-of-service rules and its own quota for hiring citizens. When Teamed is your legal employer, we apply the right rules for the country each person works in and update your contracts, policies and payroll as the law changes, so you never have to read a statute to stay compliant.
