Kuwait: Reform to end of service gratuity increases cost to employers

Regions & Countries Kuwait
Areas of Law Employment
Content Types Latest
Languages English
Employment Areas of Law Individual termination of employment

Overview

An important amendment to the Kuwait Labor Law came into force on 9 July 2017 by way of Law No. 85 of 2017, which impacts on the cost to employers of an employee's end of service gratuity (EoSG).


Contents

Previously, employers could deduct mandatory pension contributions made on behalf of GCC employees under the Social Security Law from the EoSG payable on termination of employment.  This is now no longer permissible, and instead employees are now entitled to their entire EoSG, without deductions being made for pension contributions.  

 

This will have a significant impact on the cost of the EoSG that is payable to GCC national employees in the Kuwait private sector who are registered under Kuwait's social security scheme.

Contact Information
Neil Crossley
Partner at DLA Piper
Dubai
+971 4438 6345
neil.crossley@dlapiper.com

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