The employer must provide indemnity to the employee upon resignation in accordance with the provisions of the applicable labor law, in order to avoid any penalties or fines imposed on the employer who deprives the employee of this bonus. The employee can file a complaint with the Public Authority for Manpower if he does not receive his full bonus.
What is Labor Indemnity in Kuwait?
After obtaining a Kuwait Work Visa, the foreigner must know all his rights according to the Labor Law, the most important of which are: Obtaining Indemnity at the end of service, which is: a reward that all employees in the Kuwaiti private sector are entitled to upon termination of service in accordance with the provisions of the current labor law. The value of this indemnity varies based on several factors.
Kuwait Indemnity Calculation Elements
There are several basic elements that the Kuwait Indemnity Calculator relies on according to the current labor law, namely: the length of service the worker has spent with the employer, the value of the monthly salary, and the reason for leaving work.
How to Calculate Your Kuwait Indemnity?
Indemnity for the worker in Kuwait is calculated by calculating the value of indemnity for the first 5 years and then for the following years, after which the bonus is calculated for days, months and vacation days, and in the end they are added together as follows:
Calculate Kuwait Indemnity for the First Five Years
Kuwaiti private sector workers can calculate Indemnity for the First Five Years based on the following equation:
- Indemnity for the First Five Years = ( Daily Salary × 10 ) × Number of Years
Calculate Kuwait Indemnity for Years Exceeding Five
Kuwaiti private sector workers can calculate Indemnity for the Years Exceeding Five based on the following equation:
- Indemnity for Years Exceeding Five = ( Daily Salary × 15 ) × Number of Exceeding Years
Calculate Kuwait Indemnity for months and days beyond full years
Kuwaiti private sector workers can calculate Indemnity for the months and days beyond full years based on the following equation:
- For service less than 5 years:
- Monthly Indemnity = ( Number of Months ÷ 12 ) × ( Daily Salary × 10 )
- Daily Indemnity = ( Number of Days ÷ 365 ) × ( Daily Salary × 10 )
- For service more than 5 years:
- Monthly Indemnity = ( Number of Months ÷ 12 ) × ( Daily Salary × 15 )
- Daily Indemnity = ( Number of Days ÷ 365 ) × ( Daily Salary × 15 )
Calculate Paid Leave Balance for Indemnity in Kuwait
Kuwaiti private sector workers can calculate Indemnity for Paid Leave Balance based on the following equation:
- Paid Leave Balance Amount for Indemnity = ( Number of Paid Leave Days ) × Daily Salary
Total Indemnity Calculation in Kuwait
Kuwait private sector workers can calculate Total Indemnitybased on the following equation:
- Total Indemnity = First 5 Years Indemnity + Exceeding Years Indemnity + Monthly Indemnity + Daily Indemnity + Paid Leave Balance Amount
Example Based on Indemnity Laws & Calculations
Let’s say Ibrahim worked for a company in Kuwait for 6 years, 2 months, 20 days. His monthly salary is 1,170 KD and he has 20 days of unused paid leave. How much is Indemnity worth?
- Daily Salary = 1,170 KD ÷ 26 Days = 45 KD
- Indemnity for the First Five Years = ( 45 KD × 10 ) × 5 Years = 2,250 KD
- Indemnity for Years Exceeding Five = ( 45 KD × 15 ) × 1Year = 675 KD
- Monthly Indemnity = ( 2 Months ÷ 12 Months ) × ( 45 KD × 15 ) = 112.5 KD
- Daily Indemnity = ( 20 Days ÷ 365 Days ) × ( 45 KD × 15 ) = 111 KD
- Paid Leave Balance Amount for Indemnity = ( 20 Days ) × 45 KD = 900 KD
- Total Indemnity = 2,250 KD + 675 KD + 112.5 KD + 111 KD + 900 KD = 4,048.5 KD
Kuwait Indemnity Calculate for housemaid
Indemnity for housemaid in Kuwait is calculated based on the following equation:
- Indemnity for housemaid = ( Monthly salary recorded in the contract ) × ( Number of years in service )
Cases of leaving work with full indemnity in Kuwait
The following list shows the cases of leaving work with full indemnity in Kuwait:
- If the employer does not abide by the provisions of the contract and the law.
- If an assault is committed against him by the employer or whoever represents him or by instigation or incitement by either of them.
- If his continuation of doing the work will threaten his safety or health by a decision by the Medical Arbitration Committee at the Ministry of Health.
- If the employer or his representative has introduced any act of cheating or fraud at the time of contracting in relation to the contract conditions.
- If the employer charges the labourer of committing a criminal act and a final judgment is issued and declared his innocence.
- If the employer or whoever represents him has committed an act that violate the morals against the labourer.
- If the contract is terminated by the employer.
- Upon the expiry of the term of the limited contract period without being renewed.
- If the employment contract ends due to the death of the worker, or if it becomes clear that he is unable or incapable of performing his work, or due to an illness that consumes his sick leave, as certified by the competent official medical authorities.
- Issuance of a final court judgment that declares the bankruptcy of the employer.
- The final closure of the firm.
- If the female labourer terminates the contract from her part due to her marriage within one year from the date of such marriage.
Cases of indemnity deprivation in Kuwait
The following list shows Cases of indemnity deprivation in Kuwait:
- If the labourer discloses any secrets related to the firm he works for which caused or could have caused certain losses to it.
- If the labourer commits a fault that resulted in a gross loss to the employer.
- If it is evident that the labourer has used any fraudulent act or cheating to obtain the work.
Cases of deducting part of the indemnity in Kuwait
The following list shows Cases of deducting part of the indemnity in Kuwait:
- The labourer shall have the right to receive half the terminal service indemnity if he terminates the unlimited period contract from his own part, and the term of his service is not less than 3 years and did not complete five 5 years.
- The labourer shall have the right to receive two-thirds of the terminal service indemnity if he terminates the unlimited period contract from his own part, and the term of his service is not less than 5 years and did not complete five 10 years.
Conclusion
Kuwait How website was keen to explain how to calculate Indemnity in addition to stating all the details related to it, including: cases of worker deprivation, and cases of entitlement to the full bonus or part of it.