Global PEO Services (GPS) helps companies hire employees in Kuwait without establishing a legal entity. All human resources, benefits, payroll, and tax needs for the employees are managed by the Global PEO, while the new hires and headquarter teams focus on your business goals.
When hiring employees in Kuwait, establishing a subsidiary or branch office is not always the best route, as it’s often a lengthy and expensive process. Hiring via a Professional Employer Organization (PEO), or Employer of Record (EOR), is a faster and often more effective option – especially when starting up in a new country.
Global PEO Services hires the employees on your behalf, legally contracting them through our subsidiary in accordance with Kuwait labor laws. As a result, the burden of compliance is on us and the employees can begin work for your company in a matter of days. PEOs/EORs provide you with a streamlined option for hiring employees, testing markets, and responding to growing business needs in Kuwait. With Global PEO Services, you get control without taking on legal entity liabilities, contractor risks, or sacrificing on talent or speed to market.
Kuwait - Country Overview
Kuwait, located in Western Asia, is the 4th richest country in the world based on per capita income. Its currency has the distinction of being the highest value unit of currency in the world. Monetary stability and open integration with global commerce have enabled the economy to thrive. Foreign trade is a crucial element of the country’s economy as the combined value of imports and exports equals 95% of its GDP. Kuwait is a major trading hub in the Gulf region, and it is open to foreign investments.
Al Ahmadi, Salmiya
Employment Contracts in Kuwait
It is mandatory to sign an employment contract in writing when hiring for a job in Kuwait. The contract may be for a fixed or an indefinite term. In Kuwait, a contract of employment that does not extend for more than 5 years is considered a fixed-term contract.
Use of Arabic in written contracts is mandatory. A contract may be translated into a different language and attached when resolving disputes, but, the courts of Kuwait will consider only the Arabic version in passing judgments.
Probation is allowed in employment contracts for 100 days. Both parties can terminate an employment contract without notice when it is still on probation. Employees are entitled to receive an accumulated compensation when they are terminated without notice.
Working Hours in Kuwait
In Kuwait, regular work schedule comprises 8 hours per day and 48 hours a week for most employees. An employee must get an hour of rest or break after working for 5 consecutive hours. This hour of break or rest is not considered for calculating work hours. The Ministry of Social Affairs and Labor (MSAL) can modify these standard regulations on working hours based on business requirements.
An employee may need to work overtime when it is necessary, and the employer gives the order in writing. Overtime payment is at 1.25 times the regular hourly rate for additional hours worked on the usual workdays, 1.50 times the regular hourly rate for every hour worked on the weekly rest day, and twice the regular rate for hours at work on public holidays.
Working overtime permitted only for a maximum of 90 days a year, and is restricted to additional 2 hours every day, 6 hours every week and 180 hours in a year. Employees can refuse to work overtime as it is their legal right.
Employee Leave in Kuwait
- Hijri New Year’s Day (1 Day)
- Ascension Day (1 day)
- Eid Al Fitr (2 days)
- Eid Al Adha (2 days)
- Prophet Mohammed Birthday (1 day)
- National Day (1 day)
There is another holiday observed in Kuwait called the Liberation Day, but it is not mandatory to observe for private sector organizations.
Employees can take 14 days of leave every year after completing 1 year of service, and a leave of 21 days annually after completing 5 years of service. Employers may have a say when deciding the time of taking leave. In the case an employee’s service is terminated before using the accumulated leaves, the employee receives a cash payment. This cash payment is regardless of the number of years of leave due. Payment for accumulated leave is calculated according to the last salary payable on the date of termination.
A woman employee is entitled to maternity leave for a maximum of 30 days with full pay before delivery and 40 days after childbirth. After that, the new mother may remain absent from work without pay for up to 100 days uninterrupted or with breaks, provided, she furnishes a medical certificate stating that she is sick due to parturition and gestation.
An employee is allowed to take sick leave after submitting a satisfactory medical report. For the first 6 days of sickness, the employee gets the full payment, the next 6 days gets ¾th of pay, the next 6 days on half pay, and the subsequent 6 days on ¼th of the total pay, and the following 6 days without pay. The entitlement for these payments lasts for 1 year and not based on the period of sickness.
Employee Benefits in Kuwait
Pension and Social Security
After the amendments implemented in retirement pensions on January 1, 2015, the insured persons, as well as some authorized practitioners, such as lawyers, are entitled to remuneration after completion of their employment. The pension will be paid taking into account the number of years of contributions, and the maximum years of contributions allowed are 18 years. Payments start from the date of entitlement of the retirement pension, after completing 30 years of service or reaching the age of 65.
If an employee gets injured at work, the employer needs to report the matter to the nearest police station and also to the MSAL. The injured employee can get treatment at employer’s expense in a private clinic or government hospital, whichever is suitable.
An employee is entitled to compensation on account of injuries caused by work. An employee’s family is eligible for compensation unless the employee is guilty of intentional injury or malpractice. The employee’s family can claim compensation when the employee’s injuries have led to more than 25% disability or death. In this case, even if the employee is guilty of gross malpractice, the family is entitled to the compensation.
The amount of compensation is mainly determined by the severity of an employee’s injury. If the injury leads to death, the survivors are entitled to an amount equal to at least 1500 days of salary. The current legal blood money is KD 10,000. Employees living with permanent disability are entitled to an amount equal to 2000 days of salary or higher. Survivors are also entitled to 1.33 times the legal blood money.