A Kuwait Employer of Record helps foreign employers hire and expand in Kuwait without the need to register a local entity. By partnering with a Kuwait EOR or PEO foreign employers can forget the hassles of registering their business, opening bank accounts, hiring HR and compliance experts and focus on growth and expansion plans in Kuwait.

The EOR enables you to do this by acting as the primary employer for your Kuwait employees. This means that the onus of preparing employment contracts and paying employees falls on the EOR. Moreover, the EOR also absorbs all compliance risks freeing you up from any legal liabilities.

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Expanding your team means hiring the right people for the right jobs. In Kuwait, it's important to set up a local entity to handle things like compliance, payroll, taxes, and benefits properly. The labor laws in Kuwait can be complex, and it's essential to follow them. KuwaitPEO provides a complete Employer of Record (EoR) service. We take care of payroll, taxes, benefits, and compliance, so you can focus on what's important: supporting your employees and growing your business in Kuwait.

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"Employee misclassification" occurs when employers make mistakes in how they classify their workers. This can happen when an employer wrongly labels someone as an independent contractor or doesn't give them the benefits and rights they should have as an employee.

Choosing Kuwait EOR /PEO in Kuwait helps reduce the chances of employee misclassification. Kuwait EOR /PEO ensures that everyone abides by labor laws, accurately categorizes workers, handles payroll correctly, and offers complete benefits. This allows companies to concentrate on their main activities while experts manage employment-related duties.

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Kuwait's Law No. 6 of 2010 (the "Labor Law") regulates the labor law in Kuwait and applies to workers in the private sector. The law governs terms and conditions around work hours, overtime, minimum wages, leaves.

Employment Contract

In Kuwait, employment contracts are required to be written in Arabic. However, there is also a provision that allows for the contract to be written in a second language at the request of the employee, alongside the Arabic version. This practice aims to ensure that both parties fully understand the terms and conditions of the employment agreement, promoting transparency and clarity in the employment relationship. 

Regardless of the contract's length, it should include these basic terms:

1. Identifying both parties

2. Start date (and end date for temporary contracts)

3. Workplace location

4. Job title, duties, and responsibilities

5. Base salary and other benefits

6. Working hours

7. Total annual leave days

8. Notice periods for ending employment

9. Non-compete clause

Working time

In Kuwait, the regular workweek can vary from 40 to 48 hours depending on the company. Usual office hours start at 8:30 am or 9:00 am and finish at 5:30 pm or 6:00 pm.

During Ramadan, the workday is shorter, only six hours. By law, this applies to all employees, but many companies apply it only to Muslims who fast during daylight. Also, Friday is the day of rest for Muslims. If you work a five-day week, your other day off can be either Thursday or Saturday, with Saturday being more common.

Overtime

In Kuwait, when you work extra hours, they follow certain rules as per the Kuwait Labor Law:

1. Overtime on weekdays: You can work a maximum of 2 extra hours a day, but it should not exceed 3 days a week or 90 days a year. You get paid 125% of your normal salary for these extra hours.

2. Weekend Overtime: If you work extra hours on a weekend (Friday and Saturday), you should be paid 150% of your regular salary. Plus, you get an extra day off that you can take as a paid day off.

3. Overtime on public holidays: If you work extra hours on a public holiday, you should receive 200% of your regular salary. You also get an extra day off that you can take as a paid day off.

These rules ensure that you are compensated fairly when you put in extra time at work in Kuwait.

Public Holidays

There are 8 public holidays in Kuwait, and this means you get a total of 13 days off during these holidays.

Minimum Wage

In Kuwait, the minimum wage can be different based on the type of job. For instance, in jobs related to the private sector and the oil industry, the minimum wage is 75 Kuwaiti Dinars per month.

Annual Leave

You have 30 days of annual leave.

Maternity Leave and Paternity Leave

Pregnant employees in Kuwait get 70 days of paid maternity leave, with 30 days before their due date and 40 days after giving birth. They can also ask for up to four extra months of unpaid leave after maternity leave ends. But there is no official paternity leave in Kuwait. When it comes to parental leave, there are no specific rules or laws in Kuwait.

Sick Leaves & Pay

In Kuwait, if you've been working for at least one month and you get sick, you'll receive different levels of pay depending on how long you're unable to work.

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However, if your sickness persists beyond these periods, the following 30 days will be unpaid. 

In addition to these sick pay provisions, it's mandatory for all employees in Kuwait to be provided with government medical insurance. This ensures that employees have access to necessary medical care during their illness.

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Income tax 

There is no personal income tax in Kuwait.

Other Taxes and Social Security contribution

Employer Payroll Contributions

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Employee Payroll Contributions

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Termination Process

If the employer wishes to terminate an employee in a permanent contract, then the employee must be given at least three months notice.

Employers have the authority to end a fixed-term contract for various reasons, including business needs, personal reasons, or misconduct by the worker. To terminate the contract, they must provide notice and provide a written explanation. In cases of misconduct, a warning should precede termination, allowing the employee an opportunity to clarify their actions.

Notice Period

In Kuwait, both the employer and the employee are obliged to give a notice period of three months.

Severance Pay

In Kuwait, the amount of severance pay an employee receives depends on their length of service. 

For employees paid on a monthly basis, they are entitled to 15 days' pay for each year of service during the first five years, and this increases to one month's pay per year of service thereafter, up to a maximum of 1.5 times their annual salary.

Employees who are compensated hourly, daily, or weekly, are entitled to ten days' salary for each year of service up to 5 years, and 15 days' salary for each year of service beyond that, up to a maximum of one year's salary.

Probation Periods

In Kuwait, the maximum duration for an employee's probationary period is limited to 100 days.