In Kuwait's private sector, salary adjustments, whether increases or decreases, are strictly governed by labor laws designed to protect employee rights. Employers have the discretion to offer raises based on performance, company policy, or market standards. However, any salary decrease without the explicit written consent of the employee is illegal. This article highlights the essential legal provisions related to salary changes in Kuwait, particularly for expatriate employees, to ensure fair treatment and legal compliance.

Salary Increases – Employee’s Right and Employer’s Discretion

Salary increases are not mandated by law but can be offered by employers based on several factors:

• Performance Evaluations: Raises based on employee performance.
• Company Policy: Some organizations have structured salary increment policies.
• Market Standards: Employers may adjust salaries in line with industry trends to remain competitive.
• Collective Labor Agreements: In some larger companies or unions, periodic salary increases may be included in collective agreements.

It is important to note that while salary increases are at the discretion of the employer, they must follow the company’s established procedures and the expectations of the labor market.

Salary Decreases – Strict Legal Guidelines

Article 28 of Kuwait’s Labor Law outlines clear regulations regarding salary decreases. An employer cannot reduce an employee’s salary unless the employee provides written consent. Any unilateral salary reduction without this consent is illegal.

Key points to remember:

• Written Contract Protection: If an employee’s salary is specified in a written contract, it cannot be reduced unless a new agreement is signed.
• End-of-Service Benefits: In cases of unlawful salary reduction, end-of-service benefits and indemnities are calculated based on the original salary, not the reduced one.
• Complaint Mechanisms: Employees who experience illegal salary reductions can file complaints with the Public Authority for Manpower (PAM).

For expatriates working under valid contracts, understanding these provisions is crucial to prevent unfair treatment.

What to Do If Your Salary Is Cut Illegally

If you experience an illegal salary reduction, follow these steps:

• File a Complaint: Submit a complaint to the Labor Relations Department in your governorate.
• Labor Court: If the issue remains unresolved through mediation, you may file a case in the Labor Court.

Employment Contract – Key Points for Expats

Expatriates working in Kuwait must have a written employment contract, which should specify:

• Job Title and Responsibilities: Clearly defined job role and expectations.
• Salary and Benefits: The agreed-upon remuneration and any benefits provided.
• Working Hours: A maximum of 8 hours per day or 48 hours per week.
• Contract Duration: Whether the contract is limited or unlimited.

Termination by Employer

Employers can terminate employees under specific conditions:

• With Just Cause: No notice or indemnity required if the employee has committed serious violations like theft, assault, or repeated absenteeism.
• Without Cause: If termination is not for just cause, the employer must provide notice (3 months for monthly-paid employees, 1 month for others) and pay termination indemnity (end-of-service benefits).

Unlawful Termination

If termination is unjustified, the employee can file a labor complaint and seek compensation for arbitrary dismissal.

Termination by Employee

Employees who wish to resign must provide notice (3 months). End-of-service benefits depend on years of service, as outlined:

• Less than 3 years: 50% indemnity
• 3–5 years: 75% indemnity
• Over 5 years: 100% indemnity

The probation period in Kuwait can last up to 100 days. During this time, either party (employer or employee) may terminate the contract with a 7-day notice, and no compensation is required.