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Wednesday , December 11 2019

Bankruptcy fears on labor law bill – 35 days annual leave costly

KUWAIT CITY, April 4: A high-ranking government source warned that it would be, what he called a repelling environment, for Kuwaiti employees, if the amendment to the National Labor Law to give employees (Kuwaitis and expatriates) retroactive remuneration and 35 days of annual leave during the second reading is approved, reports Al-Qabas daily.

The source revealed in a government report, a copy of which has been obtained by the daily, it will have a financial impact on the private sector resulting from the proposal to increase the days of leave, “the general cost of the implementation of the law under the (35 days) is KD 948 million for the period from 2010 to the end of 2018.”

The source said that “this size of the money to be paid to workers, goes to the expatriates”, and asked: “Is it reasonable to spend KD 908 million for expatriates while the benefit of the Kuwaiti employees in the private section is only KD 40 million? Can the Kuwaiti economy cover this amount in the event the money left the country in the form of remittances?

The source pointed out that the government’s calculation of the amount of money to be spent in the event of application of the law included 1.67 million workers (expatriates and Kuwaitis) as per the Law 6 of 2010.

The number of Kuwaitis who will benefit is 71,000 or only 4 percent of all private sector employees. The number of private sector workers is 1.67 million and the number of Kuwaitis is 71,570, equivalent to 4.28 percent of the total labor force in the private sector.

The average salary of the worker in private sector is KD 327 per month or KD 12.5 per day will be the cost the employer will have to bear as per the new law (5 days retroactively for workers from 2010 to the end of 2018) As for the additional days in dinars it will be for one year 8.36 million days; for 9 years it will be 75.29 million days; these days are equivalent to KD 75.29 million multiply by 12.5 which will equal to KD 948.32 million and the Kuwaiti share in this is KD 40.56 million only.

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