Can Your Salary Be Reduced In Kuwait? A Guide For Private Sector Workers

07/05/2025

Can Your Salary Be Reduced In Kuwait? A Guide For Private Sector Workers

In Kuwait’s private sector, salary adjustments—whether increases or decreases—are governed by clear labor laws designed to protect employee rights. While employers are free to offer raises based on performance or company policy, they cannot reduce an employee’s salary without the worker’s explicit written consent. For expatriates working under valid contracts, understanding these rules is essential to ensure fair treatment and avoid unexpected pay cuts. This article breaks down the key legal provisions related to salary changes, helping expat employees and employers stay informed and compliant.

Salary Increase – Employee’s Right

Salary increments are not mandatory by law. Employers may increase salaries at their discretion, based on:

Performance evaluations
Company policy
Market standards
Collective labor agreements, if any (usually for larger companies or unions), may contain terms about periodic raises.

Salary Decrease – Strictly Regulated

An employer cannot reduce an employee’s salary without consent.

Article 28 of the labor law states:

“It is not permitted to reduce the wage agreed upon in the employment contract unless with the written consent of the employee.”
Any unilateral salary cut without the employee’s approval is considered illegal.
Employers may not force or coerce workers into accepting salary reductions. Doing so can be challenged legally.

Important Notes:

If your salary is stated in a written contract, it cannot be reduced, even if you verbally agree later, unless a new contract is signed.
End-of-service benefits and indemnities are calculated based on your last full salary, not the reduced one (if unlawfully reduced).
The Public Authority for Manpower (PAM) handles such complaints and labor disputes in Kuwait.

What You Can Do If Your Salary Is Cut Illegally:

- File a complaint at the Labor Relations Department in your governorate.

- You can also submit a case to the Labor Court if the issue is not resolved through mediation.

Hiring Policy – Key Points

Employment Contract: Must be written in Arabic (can include another language, but Arabic prevails).

Should specify:

Job title and responsibilities
Salary and benefits
Working hours (max 8 hours/day or 48 hours/week)
Duration of contract (limited or unlimited)

Residency & Work Permit

For expats, employers must sponsor the employee and provide:

Iqama (residency visa)
Work permit
The employee cannot legally work for another company without a transfer of sponsorship.

Firing / Termination Policy – Explained

Termination by Employer

Employers can terminate an employee, but must follow these rules:

1. With Just Cause (Article 41):
- No notice or indemnity is required to pay if the employee:

Commits a serious violation (e.g. theft, assault, repeated absenteeism without valid reason, breach of trust, Conflict of interest, Disclosure risk [trade secrets, customer data etc])

- Fails to meet contractual obligations despite warnings

- Is found guilty of gross misconduct

2. Without Cause

Notice period must be given:

3 months for monthly-paid workers
1 month for others
Termination indemnity (end-of-service) must be paid
All accumulated leave, benefits, and pending salaries must be settled

Unlawful Termination

If termination is proven unjustified, the employee can:

- File a labor complaint

- Seek compensation for arbitrary dismissal

Termination by Employee

Employees can resign with:

Same notice period (3 months)

End-of-service benefit eligibility depends on years of service:

- Less than 3 years: 50% indemnity

- 3–5 years: 75%

- Over 5 years: 100%

Probation Period

Up to 100 days

Either party can terminate without compensation during this period (with a 7-day notice)

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