Kuwait Private-Sector Labor Law: The 12 Rules Every SME Owner Must Know (2026)

1. Contracts must be written, in Arabic, filed with PAM

Article 28 requires a written contract in Arabic. A bilingual contract is fine — the Arabic version prevails in disputes. It must be filed with the Public Authority of Manpower within 30 days of the employee starting. No written contract? The employee's version of the terms wins, every time.

2. Probation caps at 100 working days

Article 32 sets the maximum at 100 working days (~4.5 calendar months) and forbids repeating probation with the same employee. During probation either side can terminate with no notice and no indemnity — but salary earned and accrued leave still must be paid within 7 days.

3. Working hours: 48 per week, 45 in Ramadan

Article 64 caps standard hours at 8 per day, 48 per week, reduced to 6 per day / 36 per week during Ramadan for Muslim employees. Overtime is capped at 2 extra hours per day, 180 hours per year, paid at 1.25× (weekday), 1.5× (weekly rest day) or 2× (public holiday) — with mandatory compensatory rest.

4. Weekly rest and public holidays are paid

Article 68 guarantees one full paid rest day per week (Friday by default). Article 69 gives 13 paid public holidays a year. Work on either requires overtime pay per Article 66 — you cannot "bundle" the premium into monthly salary in advance without an itemised, signed schedule.

5. Annual leave: 30 days after 9 months

Article 70 grants 30 calendar days of paid annual leave after 9 months of service. It cannot be waived. Only 2 years of leave may be rolled over. On termination, all unused leave must be cashed out at the last basic salary rate. Founders under-count this: 30 calendar days is ~22 working days once Fridays are excluded.

6. Sick leave is generous and tiered

Article 74 grants each employee, per year:

• 15 days at full pay
• 10 days at three-quarters pay
• 10 days at half pay
• 10 days at quarter pay
• 30 days unpaid

A government hospital medical certificate is required beyond 3 consecutive days. Employers cannot terminate an employee while on certified sick leave.

7. Maternity leave: 70 days paid

Article 24 grants female employees 70 days of fully-paid maternity leave (which cannot be counted against annual leave) plus, at the employer's discretion, up to 4 months unpaid extension. Termination during maternity leave or the following 6 months is prohibited unless for gross misconduct.

8. Salary must go through WPS — in Kuwaiti Dinars

Since 2016, all private-sector salaries must be paid via the Wage Protection System (WPS) into a Kuwaiti bank account, in KD, on or before the 7th of the following month. Article 55 forbids cash salaries. Non-compliance triggers KD 500–1,000 fines and, on repeat, PAM quota suspensions.

9. Notice: 3 months either way

Article 44: indefinite-term monthly-paid contracts require 3 months' written notice from either side. The party that skips notice owes the equivalent in pay. During notice, the employee is entitled to 8 paid hours per week to search for a new job.

10. End-of-service indemnity accrues from day one

Article 51 is the single most litigated article. Monthly-paid employees earn 15 days of last salary per year for the first 5 years and a full month per year after — capped at 1.5 years of salary. Termination for gross misconduct under Article 41 (fraud, violence, unauthorised absence over 7 days, etc.) is the only forfeiture — and the burden of proof is on the employer.

11. Wrongful termination is compensated separately

Article 46 lets a court award additional compensation on top of notice and indemnity if it finds termination was arbitrary or retaliatory. Standard awards are 3–12 months of salary. The single best defence is a documented progressive-discipline paper trail: verbal warning → written warning → final warning → termination.

12. Disputes go to the Labour Court — with fee-free access for employees

Employees file complaints at PAM's Labour Relations department first (free, mandatory conciliation, ~30 days). Unresolved cases go to the Labour Court, where employees pay no court fees. Most cases resolve at conciliation if the employer produces contracts, WPS records and warning letters. If you have none of those, expect to lose.

The Alliance compliance checklist

• Bilingual Arabic-English contract, filed with PAM within 30 days.
• Signed job description and offer letter with salary breakdown (basic + allowances).
• WPS enrolment through a Kuwaiti bank account, salary paid by the 7th.
• Attendance and overtime records kept for at least 2 years.
• Written policies for leave, sick leave, disciplinary steps — acknowledged by each employee.
• End-of-service accrual tracked monthly in your books (not calculated at exit).
• Progressive-discipline template ready before you ever need it.