While the calculation for public sector employees is made according to the Public Institution for Social Security laws, private sector employees and domestic workers see their calculations made differently.

The Complete Guide to Understand the Indemnity Law in Kuwait

The term compensation refers to the amount an employee receives at the end of service in Kuwait according to the current labor law or various provisions of the Public Institution for Social Security and Civil Service laws. While the calculation for public sector employees is made according to the Public Institution for Social Security laws, private sector employees and domestic workers see their calculations made differently.

How to Calculate Your Indemnity in Kuwait

To calculate your indemnity in Kuwait, Here’s how you can do it:

• Indemnity for the First Five Years = ( Daily Salary × 10 ) × Number of Years
• Indemnity for Years Exceeding Five = ( Daily Salary × 15 ) × Number of Exceeding Years
• Indemnity for months and days beyond full years - For service less than 5 years:
  • Monthly Indemnity = ( Number of Months ÷ 12 ) × ( Daily Salary × 10 )
  • Daily Indemnity = ( Number of Days ÷ 365 ) × ( Daily Salary × 10 )
• Indemnity for months and days beyond full years - For service more than 5 years:
  • Monthly Indemnity = ( Number of Months ÷ 12 ) × ( Daily Salary × 15 )
  • Daily Indemnity = ( Number of Days ÷ 365 ) × ( Daily Salary × 15 )
• Paid Leave Balance Amount for Indemnity = ( Number of Paid Leave Days ) × Daily Salary
• Total Indemnity = First 5 Years Indemnity + Exceeding Years Indemnity + Monthly Indemnity + Daily Indemnity + Paid Leave Balance Amount

How to use Kuwait Indemnity Calculator step By step

To benefit from Kuwait Indemnity Calculator online, Just follow these easy steps:

• Step 1: Go to the indemnity calculator.
• Step 2: Add the start date of work.
• Step 3: Determine the end date of work using the available calendar.
• Step 4: Enter the salary value in the designated field.
• Step 5: Write the number of Unpaid Leave Days.
• Step 6: Click on the Calculate Indemnity icon.

How to calculate Kuwait Indemnity for domestic workers

Calculating the indemnity for domestic workers would require the sponsor to give his workers an amount equal to their last month salary multiplied by number of years of completed service performed under him. This amount must be due to the domestic worker at the moment of termination of the contract; not having paid this, the worker may file a complaint to the competent authority for non-compliance with the contract.

Exceptions and Limitations for Indemnity in Kuwait

While the Indemnity Law covers most employees, there are some exceptions and limitations, including:

• Misconduct Under Dismissal: Serious misconduct by a worker will entail the forfeiture of such workers' right to indemnity. Misconduct would constitute criminal behavior, violation of company laws, or damage to company property.
• Short-Term Employ: An employee cannot ask for indemnity if, under normal circumstances, he has worked for under 3 months.
• Non-Compliance With Notice Period: Should a worker resign without giving the required notice, such notice as stipulated by the employment contract, the indemnity payment will be reduced.

Factors affecting indemnity value in Kuwait

Here are the factors affecting indemnity value in Kuwait other than service period:

• Basic Salary: Indemnity is based on basic salary including bonuses, allowances, and/or commissions. The higher the basic salary, the more the indemnity. You can go to the csc.net.kw Salary English service to know the value of the employee’s salary easily.
• Type of Employment Contract: Terms of indemnity may differ for limited-term and unlimited-term contracts, with permanent employees generally entitled to indemnity either upon resignation or termination.
• Reasons for Termination:
  • If termination is ordered by the employer for reasons not acceptable under law, indemnity must be paid.
  • Resignation may lessen the indemnity, especially if the employee has not worked five years.
  • Employees terminated due to gross misconduct (such as theft or fraud) have typically no claim to indemnity.
• Notice Period: If there is failure to serve the prescribed notice of termination in the employment contract, indemnity might be decreased.
• Allowances, commissions, and bonuses: This may vary pending on the employment contract, but it is possible that allowances, commissions, and bonuses might be fairly included in the calculation of the indemnity.
• Retirement and Death: Upon retirement or death, indemnity is computed on the last salary paid and years of service and shall be paid to the employee or to his heirs.
• Legal Disputes and Delays: Disputes between the employee and employer regarding indemnity can, in many instances, delay payments, where sometimes it becomes essential to seek legal recourse, which greatly affects ultimately the amount entitled to one under such indemnity.

Conclusion

Understanding Kuwait’s Indemnity Law is essential for both employees and employers to ensure fair compensation upon termination. By knowing the regulations, eligibility, and calculation methods, employees can secure their rights. For a complete guide to related services and legal assistance, visit the Kuwait E-Portal, which provides detailed information and support.