Hiring in Kuwait is rewarding as it enables multinational corporations and startups to expand their presence in the Middle East. With a strong emphasis on economic diversification, Kuwait advocates investments in finance, real estate, tourism, and healthcare. Kuwait Vision 2035 presents exciting opportunities for employers seeking to build a skilled and diverse workforce.
From navigating Kuwaiti labor laws to ensuring compliance with visa regulations, hiring in Kuwait demands a strategic approach. We have listed below the legal considerations and cultural nuances involved in hiring employees in Kuwait and assembling a compliant team in this unique Middle Eastern setting.
Kuwait Labor Law
Companies looking to hire in Kuwait must navigate through the intricacies of the labor laws to extend all statutory benefits to the employees. Here is a quick overview of the Kuwaiti labor law for your convenience.
Working Hours in Kuwait
- Employers can set a six-day week working hours in Kuwait.
- The mandated working hours in Kuwait are 48 per week or eight per day.
- Some restrictions per Kuwait labor law on the mandated working hours apply as follows:
- Employers must limit the total working hours in Kuwait during Ramadan to 36 hours per week.
- Employers must avoid enforcing continuous working for five hours, except in financial, commercial, and investment sectors.
- Further, employers must ensure an additional rest break of one hour while extending a two-hour break during working hours to eligible lactating employees for feeding.
- Generally, weekends in Kuwait fall on a Friday and Saturday. Employers must compensate 50% more than the regular pay for work on weekly off days.
Overtime Pay
- Kuwaiti labor law also allows employers to enforce overtime working hours as follows:
- Hour-wise relaxations: No more than two hours a day or 180 hours a year, and
- Day-wise relaxations: Three days a week or 90 days a year
- Employers must compensate 25% more than regular hourly pay for work during the overtime period.
Probation Period in Kuwait
- Employers may include a specific probationary period in the employment contract.
- However, the law restricts probation periods in Kuwait to 100 days.
End of Service Benefits
- Kuwaiti labor law requires three months of prior notice from the employer or employee to terminate the employment contract. However, employers may extend only one month of prior notice to independent contractors.
- Employers must also oblige to the End of Service Benefits (EOSB) as follows:
- The worker gets 10 days' pay for each of the first five years and 15 days thereafter, with a limit of one year's pay for daily, weekly, hourly, or piecework employees.
- For monthly-paid workers, it's 15 days' pay for the first five years and one month thereafter, capped at one and a half years' pay.
- The law also includes a provision in which employers or employees may demand suitable compensation for not serving the mandatory notice period upon termination.
- Employers may dismiss employees for being absent from work for seven consecutive days or 20 days in a year without notice.
- Employers are also liable to pay indemnity payments to expatriates who have completed over three years of service in Kuwait.
Payroll and Taxes in Kuwait
Payroll in Kuwait involves periodic calculation of wages, bonuses, allowances, leave benefits, and deducting social security contributions while reporting them directly to the concerned authorities. Here is an overview of the payroll process in Kuwait:
Minimum wage
- Employers must determine salaries in Kuwaiti Dinar considering the statutory minimum wages, applicable paid leave benefits, overtime work, social security contributions, and other bonuses.
- The present minimum wage in Kuwait is 75 Kuwaiti dinars (KWD) per month.
- Kuwaiti labor laws acknowledge the right to equal pay for equal work.
Tax deductions & social security contributions:
- There is no personal income tax imposed on individuals in Kuwait. However, employers are obliged to contribute towards pensions on retirement and allowances for disability, sickness, and death.
- Employers must account for deductions related to social security contributions at the ceiling rate of 2,750 Kuwaiti dinars (KWD) monthly salary (11.5% from the employer and 8% from the employee).
Payroll frequency:
- Payroll frequency in Kuwait is generally monthly for full-time employees and bi-monthly for independent contractors. You can pay salaries through direct deposit, cheque, or cash.
- Kuwaiti labor laws mandate employers credit salaries within seven days of the due date.
The payroll regulations can involve extensive legal obligations for new businesses in Kuwait. Here is when you may need a global payroll solution like Skuad to instantly manage payroll in Kuwait with just the click of a button!
Employee Benefits in Kuwait
Public Holiday
- Employers in Kuwait may follow the lunar Islamic Calendar to grant official holidays.
- Accordingly, employers must grant thirteen days of paid holidays for:
- Hejira New Year (1 day)
- Isra’ and Mi’raj day (1 day)
- Eid Al-Fitr (3 days)
- Waqfat Arafat (1 day)
- Eid Al-Adha (3 days)
- Prophet’s Birthday (1 day)
- National Day (1 day)
- Liberation Day (1 day)
- Gregorian New Year (1 day)
- Employers must offer double the remuneration for work on public holidays and an additional day off as applicable.
Leave Benefits in Kuwait
Employers may follow the statutory leave policy in Kuwait to extend vacations and other leave benefits to their employees.
Annual leave:
- Employers in Kuwait must provide at least 30 days of paid annual leave every year.
- Employers may limit the paid annual leave benefits to employees with continuous service of more than nine months.
Maternity leave:
- The paid maternity leave in Kuwait lasts 70 days.
- Employers may extend unpaid maternity leave for up to four months after the birth.
- However, there are no mandatory obligations to extend paternity leave in Kuwait.
- Employers with 50 or more female employees (overall 200 employees) must provide crèche facilities, feeding rooms, and a nursery at the workplace.
Sick leave:
- The sick leave paid benefits per Kuwait labor laws is as follows:
- First 15 days at 100% pay
- Following ten days at 75% pay
- Following ten days at 50% pay
- Following ten days at 25% pay
- The following 30 days are without pay
- Employers in Kuwait may seek a medical certificate to extend sick leave benefits.
Special leaves:
- Employers must grant a paid leave of eight hours or one day a week during the notice period for job search.
- Employers may provide paid academic leave for up to five years to obtain a higher degree in the relevant field.
- Employers may offer 21 days of paid leave to perform Hajj (annual Islamic pilgrimage).
- Employers may extend paid leave of four months and ten days to perform Iddah/iddat (period of waiting after the death of a husband) or 21 days to non-Muslim employees.
- Employees also get paid leave to attend conferences, annual gatherings and labor meetings.
Cost of Hiring an Employee in Kuwait
The cost of hiring in Kuwait varies on whether you set up a legal entity or skip it to partner with Employer of Record (EOR) service providers. Here is a quick comparison between both approaches:
Establishing a Subsidiary vs. Using EOR in Kuwait
| Parameters |
Setting up a subsidiary |
Partnering with Skuad |
| Setup Cost |
Companies may incur high administrative, legal, and professional fees to register and set up a physical location in Kuwait. |
Low investment since Skuad already has a established presence. |
| Setup duration |
New business entities in Kuwait may take several months to start operations. |
With Skuad, you can start hiring employees in days. |
| Operating cost |
HR, payroll compliance, and office overheads constitute a significant portion of operating expenses. |
Skuad automates HR admin like payroll processes, benefits management, and compliance risk at a nominal fee. |
| Employment liability |
The subsidiary assumes all risk liabilities while hiring in Kuwait. The parent company may be involved. |
Skuad’s EOR platform assumes all compliance risks for employment in Kuwait. |
| Best suited for |
Businesses looking for long-term returns from the Kuwaiti market. |
Companies, big and small, looking to quickly establish their presence in Kuwait. |
| Parameters |
Partnering with Skuad |
Setting up a subsidiary |
| Setup Cost |
Low investment since Skuad already has a established presence. |
Companies may incur high administrative, legal, and professional fees to register and set up a physical location in Kuwait. |
| Setup duration |
With Skuad, you can start hiring employees in days. |
New business entities in Kuwait may take several months to start operations. |
| Operating cost |
Skuad automates HR admin like payroll processes, benefits management, and compliance risk at a nominal fee. |
HR, payroll compliance, and office overheads constitute a significant portion of operating expenses. |
| Employment liability |
Skuad’s EOR platform assumes all compliance risks for employment in Kuwait. |
The subsidiary assumes all risk liabilities while hiring in Kuwait. The parent company may be involved. |
| Best suited for |
Companies, big and small, looking to quickly establish their presence in Kuwait. |
Businesses looking for long-term returns from the Kuwaiti market. |
Top Job Listing Sites in Kuwait
You can explore online platforms to discover top talents and facilitate hiring in Kuwait. Below listed are some noteworthy job listing websites in Kuwait:
- Bayt.com: leading job portal in the Middle East and North Africa (MENA) region.
- GulfTalent: job portal that covers the Gulf region, including Kuwait.
- Akhtaboot: an Arab world career network and a job search engine.
- SOS HR Solutions: a Kuwait-based recruitment agency.
- 1KuwaitJobs.com: a local job portal focused on Kuwait.
The choice of a job listing site depends on your specific needs and budget. It is advisable to consider factors such as industry specificity, job posting limit, ability to filter candidates, and the scope of employer branding to attract top talents when hiring in Kuwait.
Compliance Risks of Hiring Employees in Kuwait
You must be aware of the following compliance risks involved while hiring employees in Kuwait:
- Employing juveniles and women: Employers cannot ask women to work during night hours or in establishments that provide services exclusively for men. Further, employing anyone below the age of 15 years is prohibited. Failure to strictly implement may attract penalties.
- Understanding cultural nuances: Employers must respect Islamic personal laws while granting special leave for religious purposes like Hajj and Iddah. Moreover, workplace ethos must follow common public morals. Failure to do so may invite legal claims.
- Hiring foreign employees: Employers should know any quotas or requirements for hiring Kuwaiti nationals. Further, employers are responsible for sponsoring work visas in Kuwait for expatriate employees and require due compliance with immigration regulations. Failure to obtain or renew necessary work permits in Kuwait can lead to deportation of the employee and penalties for the employer.
- Contract obligations: Kuwaiti labor law requires written employment contracts for all employees. It must be in Arabic and include terms and conditions of work, such as salary, working hours, benefits, and termination clauses. Failing to provide adherence may lead to legal consequences.
- Data Protection and Privacy: Employers must obtain consent from employees for data collection, implement data security measures, and restrict data access to authorized personnel. Failure to comply may affect reputation and financial penalties.
Employers can consider engaging the services of a reputed Professional Employer Organization (PEO) or Employer of Record (EOR) in Kuwait, like Skuad, to mitigate these compliance risks.
How to Hire Talent in Kuwait
When looking to hire employees in Kuwait, you may train your internal resources or outsource HR solutions to a reputed service provider. We recommend you go about it in the following ways:
Option 1: Form a Local Subsidiary
- Setting up a subsidiary in Kuwait can help you hire employees using internal resources.
- This approach may suit multinational corporations making substantial investments in Kuwait as it directly oversees employee activities.
- Forming a subsidiary may involve high costs and be directly liable for all employment & labor disputes.
Option 2: Hire Contractors
- Employers may engage Kuwaitis or foreigners, including freelancers, on project-based contractual arrangements.
- Working with contractors saves costs and avoids the obligations to extend statutory benefits in Kuwait, such as paid leave entitlements, social security contributions, etc.
- However, hiring independent contractors may limit operational abilities as it can translate to lesser control over daily activities. Moreover, you are always at a legal risk of misclassification.
Option 3: Partner with and Employer of Record
- Global companies are favoring HR innovations like EOR solutions to mitigate the cost of hiring in Kuwait.
- An EOR service provider such as Skuad manages compliance risks while hiring employees without you having to form a subsidiary in Kuwait.
- Skuad acts as the legal employer for your hired employees in Kuwait. It controls their payroll, assumes compliance risks, and oversees other HR-related admin tasks.
Hiring Trends in Kuwait in 2024
Global companies looking to hire in Kuwait may take stock of the following labor market situation:
- A survey noted a shift to Kuwaitization (preference for locals over foreigners) in most sectors' senior management and executive management. Additionally, the government is proactively implementing programs to augment the skills and capabilities of Kuwaiti citizens.
- Another survey found that 61% of companies in Kuwait considered altering their employer value proposition in response to the external labor market.
- Moreover, there is an all-time high need among employers to have a dedicated human resources department, especially after the pandemic.
Further, multiple survey findings suggest an increasing preference for organizational restructuring, embracing digital transformation, automating HR service deliveries to hire employees in Kuwait, and reducing the impact of a growing unstable work environment.
Simplify Hiring in Kuwait With Skuad
As Kuwait continues economic diversification, companies must proactively align their hiring practices with emerging trends. Now is the time to embrace digital innovation through EOR solutions and streamline your hiring process in Kuwait.
Skuad offers a powerful EOR platform that simplifies onboarding, payroll, benefits management, and compliance risks for employers in Kuwait.
Book a demo with Skuad and see how we can make your hiring experience in Kuwait hassle-free!
FAQs
Q1. How to hire employees in Kuwait?
A1. Hiring employees in Kuwait requires a comprehensive approach. Start by familiarizing yourself with Kuwaiti labor laws and covering employment contracts, working hours, and wages. You must possess the necessary work permits and visas to hire foreign employees. Additionally, you must remain attentive to the legal and cultural aspects of hiring in Kuwait to build a compliant and effective workforce.
Q2. What are the labor laws in Kuwait?
A2. Kuwaiti labor laws are a combination of various legislations that include Private Sector Labor Law No. 6 of 2010, Labor Code for the Public Sector Law No. 18 of 1960, Domestic Workers Law No. 21 of 2007, Labor Inspection Law No. 6 of 2010, Social Security Law No. 19 of 1961, and Occupational Safety and Health Law No. 26 of 2015. Additionally, regular ministerial decrees and regulations provide more detailed guidance on specific aspects of labor law.
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