Kuwait Private Sector Labour Law: Rights, Contracts & Termination Regulations
Employment relations within the private commercial sector of the State of Kuwait are governed primarily by Law No. 6 of 2010 (Kuwait Private Sector Labour Law) and its subsequent ministerial amendments. Supervised by the Public Authority for Manpower (PAM), this legal framework establishes statutory minimums regarding working hours, paid leave entitlements, disciplinary measures, termination notice periods, and end-of-service financial benefits (indemnity).
| Statutory Provision | Law No. 6 of 2010 Mandate |
|---|---|
| Governing Regulatory Body | Public Authority for Manpower (PAM / الهيئة العامة للقوى العاملة) |
| Maximum Working Hours | 48 hours per week (8 hours per day); reduced to 36 hours weekly during Ramadan |
| Statutory Probation Window | Maximum 100 working days (cannot be repeated with the same employer) |
| Paid Annual Leave | 30 working days per continuous year of service (accrued after 6 initial months) |
| Statutory Notice Period | 3 months written notice for monthly salaried staff (unless contract provides longer) |
| Official PAM Gateway | manpower.gov.kw |
1. Working Hours, Overtime & Leave Entitlements
The law establishes rigid ceilings on daily labor to safeguard health and safety, requiring mandatory rest intervals:
- Continuous Work Limits: Employees must not work for more than 5 consecutive hours without a minimum rest interval of one hour. Rest intervals are not counted toward paid working hours.
- Overtime Remuneration: Overtime is permitted up to 2 hours per day or 180 hours per year, compensated at 125% of the normal hourly basic wage on standard days, 150% on official rest days (Fridays), and 200% on official public holidays.
- Sick Leave Accrual: Employees are entitled to up to 15 days of fully paid sick leave per year, followed by 10 days at 75% salary, 10 days at 50% salary, and 10 days at 25% salary, upon presentation of verified medical certifications.
- Maternity Leave: Female workers are entitled to 70 days of fully paid maternity leave, with optional unpaid leave of up to four months for child care.
2. End-of-Service Indemnity (Mokafaa Nihayat Al-Khidma)
Indemnity represents a statutory deferred severance benefit mandated for all employees not covered by national social security pension schemes (all foreign expatriates on Article 18 permits). It is calculated based on the employee’s most recent gross salary (basic wage plus regular housing and transportation allowances).
| Length of Continuous Service | Statutory Formula (Monthly Paid) | Overall Statutory Cap |
|---|---|---|
| First 5 Years | 15 days of salary per completed year | 75 days total for the first 5-year block |
| Beyond 5 Years | 30 days (1 full month) of salary per completed year | Capped at an aggregate maximum of 1.5 years’ total salary |
Indemnity Entitlement by Termination Mode (Resignation Rules)
Under indefinite contracts, if the employer terminates employment, the employee receives 100% of the calculated indemnity. If the employee tenders resignation voluntarily, statutory payout scales apply:
- Under 3 Years of Service: Zero indemnity entitlement upon voluntary resignation.
- 3 Years to Under 5 Years: Entitled to half (50%) of the calculated indemnity.
- 5 Years to Under 10 Years: Entitled to two-thirds (66.67%) of the calculated indemnity.
- 10 Years or More: Entitled to 100% full indemnity payout upon voluntary resignation.
3. Fixed vs. Indefinite Contracts & Termination Notice
Kuwait labor contracts are registered directly with PAM as either fixed-term or indefinite:
- Fixed-Term Contracts (Not Exceeding 5 Years): Automatically terminate on the agreed date unless formally renewed. Early termination without cause by either party may trigger compensation claims for the remaining contract duration.
- Indefinite Contracts: Either party may terminate with a statutory 3-month written notice period for monthly salaried personnel. The employer must grant the worker one day off per week during notice to seek alternate employment.
- Article 41 Summary Dismissal: Employers may terminate an employee without notice or indemnity only under specific legal grounds, including gross misconduct, fraud, severe safety violations, unexcused absence exceeding 7 consecutive days, or final criminal conviction.
4. Labor Dispute Resolution & Labor Court Pathway
When workplace grievances, delayed salary payments, or arbitrary dismissal occur, the statutory pathway requires administrative mediation before court proceedings:
- PAM Department of Labor Relations: The worker submits a formal complaint at the relevant governorate labor office or electronically via the Sahel application.
- Amicable Reconciliation Hearing: PAM summons both employee and employer for mediation within 14 days of filing.
- Referral to Labor Court: If an amicable settlement is not reached, PAM must refer the file to the Labor Circuit of the Court of First Instance. Under Article 7 of the law, labor lawsuits filed by employees are exempt from court fees at all litigation tiers.
Wage Protection System (WPS) Mandate: Private companies in Kuwait must deposit employee salaries directly into licensed Kuwait commercial bank accounts by the 7th day of each calendar month. Employers failing to comply face immediate administrative suspension of company files and work permit issuance by the Public Authority for Manpower.
Frequently Asked Questions
Can an employer hold an employee’s passport in Kuwait?
No. Under Ministerial Decision No. 166 of 2007 and Kuwait judicial precedent, withholding an employee’s passport is strictly illegal. The passport remains the personal property of the holder, and employers retaining passports without written judicial authorization face regulatory sanctions from PAM and the Ministry of Interior.
How is daily wage calculated for indemnity and leave settlements?
Pursuant to Kuwait Court of Cassation rulings, for monthly salaried workers, the daily wage for calculating end-of-service indemnity is computed by dividing the gross monthly salary by 26 working days (excluding weekly rest days), whereas encashment of unused annual leave is computed based on 30 calendar days.
What happens to indemnity if a worker is terminated arbitrarily?
If an employer terminates an employee without valid legal justification under Article 41, the employee is entitled to receive full end-of-service indemnity, compensation for unused accrued annual leave, compensation in lieu of notice (if not served), and additional damages for arbitrary dismissal awarded by the Labor Court.
Official Government Portals: moi.gov.kw | paci.gov.kw | e.gov.kw | manpower.gov.kw
Kuwait.ee is an independent cultural archive and digital directory established in 2016 to document Kuwaiti heritage and provide procedural summaries for foreign residents. Administrative fees, penalties, and immigration rules change frequently under ministerial decrees. Always verify information directly with authorized state authorities before taking administrative or financial actions.
Editorial & Compliance Enquiries: Contact us via email