Minimum Wage
Labour law defines wage as the basic salary received or should be received by the worker against or because of his work. Wage includes basic pay, incentives, commissions, obligatory bonuses, gratuities from third parties and allowances from which the employee benefits (such as housing allowance), but excludes allowances on account of expenses and profit shares.
The Minister issues a decision regarding minimum wages after consultation with the Consultative Committee for Labour & Organization Affairs. The Minister fix the minimum wages taking into account the inflation rates witnessed by the country and also considering the nature of profession and trade. Minimum wages are revised by the Minister once every five years.
Source: §55 & 63 of the Labour Law for Private Sector (Law No. 6 of 2010)
For updated minimum wage, please refer to the section on minimum wages.
Regular Pay
Wages should be paid to the employees in the legal currency (Kuwait Dinar), within 7 days of the after the due date. Wages are deposited in workers’ accounts opened with their local financial institutions. A copy of statement sent to that institution is also forwarded to the Ministry of Social Affairs and Labour. Whatever is included in total remuneration is important because this is the figure that must be used when calculating terminal indemnity (severance pay) or compensation on account of injury. Where an employee is paid on time basis, the last salary payable is used. If the worker is paid on piece-rate basis, the average wage actually payable to him during the previous three months is used.
Salaried employees must be paid at least once a month. Piece-rated workers and those on hourly or weekly wages must be paid every two weeks. Without worker's consent, the employer may not transfer monthly paid worker to another class. Rights obtained by the workers are also never compromised during transfer. A worker’s wages may not be reduced for any reason whatsoever.
Workers are not obliged to buy foods or goods from specific stores or buy goods produced by the Employer. If an employee owes his employer money, up to 10% of his salary may be deducted to pay off his debt and he may not be charged interest. Where an employee’s salary is attached on account of debts to third parties (settling a debt of alimony, food, clothes and other debts), the deduction is limited to 25% of his salary. In case of coincidence, alimony debts have preference over any other debts. Deductions in case of compensation for loss must not exceed 5 days’ wages in any one month. In the event where the punishment exceeds such deduction, the exceeding amount is deducted from remuneration of the following month(s).
Payment of a bonus is obligatory if it is stipulated in the contract of employment or in the by-laws of the firm or if it has been paid in the same amount regularly every year.
If an employer starts a lockout to force workers in obeying his demands, he is required to pay workers’ wages. Similarly, if a plant is wholly or partially closed for reasons other than linked to workers, workers are entitled to wages for this period if employer wants these workers to continue working for him.
In case of noncompliance with the depositing of workers’ wages to their bank accounts, employer is subject to a fine not exceeding the total of the workers’ entitlements that he failed to settle. This fine would not affect employer’s duty to settle entitlements to workers.
Source: §38, 55-62 & 139 of the Labour Law for Private Sector (Law No. 6 of 2010)
