End-of-Service Gratuity in Kuwaiti Law

End-of-service benefits are among the most critical financial rights guaranteed by the Kuwaiti Labor Law for both national and expatriate workers. These benefits serve as a legal guarantee to compensate employees for their years of service. However, many disputes arise due to misunderstandings regarding calculation methods or refusal of payment.

What is the End-of-Service Gratuity?

It is a financial sum entitled to the worker upon the termination of their employment contract, calculated based on the duration of service, wage type, and the nature of termination, according to the Kuwaiti Private Sector Labor Law.

Legal Basis for the Gratuity in Kuwait

The law mandates that the employer pays this benefit unless the termination is due to severe legal reasons that might partially or fully waive this right in very specific cases.

How to Calculate End-of-Service Benefits

Calculation differs based on the payment method:

• Monthly-Paid Employees:
  • 15 days’ pay for each of the first five years.
  • One full month’s pay for each year thereafter.
  • Maximum cap: One and a half years’ salary.
• Daily or Piece-Rate Employees:
  • 10 days’ pay for each of the first five years.
  • 15 days’ pay for each year thereafter.
  • Maximum cap: One year’s salary.

Is the Worker Entitled to Gratuity Upon Resignation?

Yes, the worker is entitled to it, but it may be partial depending on the length of service, unless stated otherwise by law or contract without violating public policy.

Cases of Forfeiture of Gratuity

A worker may be deprived of the benefit in exceptional cases, such as:

• Committing a legally proven gross error.
• Disclosing trade secrets.
• Assaulting the employer or officials.
• Frequent absence without a legitimate excuse.

The Role of Al-Subaiei Law Firm in Labor Disputes

Our specialized team assists in:

• Accurate calculation of entitlements.
• Verifying the legality of termination.
• Representing clients before the Ministry of Social Affairs and Labor.
• Filing labor lawsuits in case of non-payment.