Kuwait Labour Law: How to Calculate Indemnity Online

As an OFW based in Kuwait, you should know your rights when it comes to end-of-service benefits. The Philippines has a bilateral labor agreement (BLA) with Kuwait, which means that both countries have agreed on the terms and conditions of employment. One of the provisions of this BLA is the indemnity payment that OFWs are entitled to when they leave their employers in Kuwait. In this article, we’ll show you how to calculate your indemnity online according to Kuwait Labor Law, ensuring that you receive what you’re entitled to.

Don’t leave your hard-earned benefits on the table – read on to find out how to calculate your indemnity and get what you deserve.

What is Indemnity?

Indemnity refers to the compensation or reimbursement given to an individual in the event of losses or damages they have suffered. This can include compensation for financial losses, physical injuries, or other types of damage.

For overseas Filipino workers, indemnity is especially important because it offers them a level of financial protection should they experience any mishaps or difficulties while working abroad.

This can include compensation for injuries sustained while on the job, as well as payment for any losses that may have occurred due to unforeseen circumstances such as:

• natural disasters,
• political unrest, or
• other situations outside of their control.

Additionally, indemnity can help ensure that OFWs receive fair treatment from their employers, as it creates a legal obligation for employers to compensate workers for any losses or damages that occur while on the job.

This can help deter employers from engaging in unethical practices and can also help protect workers from exploitation or abuse.

Indemnity is an important consideration for any OFW looking to work abroad. By understanding their rights and entitlements under indemnity provisions, workers can better protect themselves from potential risks and ensure that they are fairly compensated for any losses or damage that occur while on the job.

What is Indemnity Law in Kuwait?

According to Kuwait labour laws, indemnity refers to the end-of-service benefits that employers are required to pay to their employees upon termination of their employment contracts. It is based on the length of service and the employee’s last salary and is designed to provide financial security to employees who have completed their employment contracts.

The Kuwaiti and Philippine governments have both taken steps to uphold the Indemnity Law for migrant workers, although the specific approaches may differ between the two countries.

In Kuwait, the government has implemented various measures to ensure that employers comply with the country’s labor laws, including those related to indemnity for migrant workers.

These measures include regular inspections of worksites by labor inspectors, as well as fines and other penalties for employers who fail to provide their workers with the required compensation.

Meanwhile, the Philippine government has been active in advocating for the rights of OFWs and enforcing the provisions of the Indemnity Law.

The Philippine Overseas Employment Administration (POEA) is responsible for ensuring that all overseas employment contracts include provisions related to indemnity, and for monitoring compliance with these provisions.

The Philippine Embassy in Kuwait also provides assistance to OFWs who have experienced difficulties with their employers, including those related to indemnity.

Requirements

In Kuwait, the requirements for receiving indemnity as a migrant worker are set out in the country’s labor laws. The specific requirements may vary depending on the circumstances of the worker and their employer, but in general, the following criteria must be met:

1. Completion of the employment contract: The worker must have completed their contractual period of employment or have a valid reason for terminating the contract early.
2. Legal status: The worker must have entered the country legally and must have a valid residency permit.
3. Termination of employment: The employment must have been terminated either by mutual agreement between the worker and employer, or by the employer for reasons other than the worker’s misconduct.
4. Eligibility for indemnity: The worker must be eligible for indemnity under Kuwaiti labor law, which generally includes compensation for end-of-service benefits, including gratuity and leave indemnity.
5. Settlement of any outstanding debts: The worker must have settled any outstanding debts with their employer, such as loans or advances, before receiving their indemnity payment.

Once these requirements are met, the worker can file a complaint with the Kuwaiti labor authorities, who will investigate the matter and ensure that the employer pays the appropriate compensation.

In some cases, the worker may need to seek the assistance of a legal representative or labor union to help them navigate the process and ensure that their rights are protected.

Qualifications

• All workers, including migrant workers, who have completed at least one year of continuous service with their employer are eligible for indemnity.
• Domestic workers, who were previously excluded from the law, are now covered under its provisions.
• Indemnity is calculated based on the worker’s length of service, their basic salary, and other factors.
• Workers who have completed one year of service, but less than five years are entitled to receive 15 days’ worth of their basic salary for each year of service.
• Workers who have served for five years or more are entitled to one month’s worth of their basic salary for each year of service.
• Exceptions to the Indemnity Law’s coverage include workers who are dismissed for cause or who voluntarily resign before completing their contract term.
• Workers who have been employed for less than one year are generally not entitled to receive indemnity, although they may still be eligible for other forms of compensation or benefits.

How to Compute Indemnity in Kuwait (Step by Step Process)

1. Determine the employee’s length of service: The first step is to determine how long the employee has worked for the company. The length of service will determine how much indemnity pay the employee is entitled to.
2. Determine the employee’s last received wage: The second step is to determine the employee’s last received wage. This is the amount of money the employee earned in their final month of work.
3. Determine the type of indemnity pay the employee is entitled to: As mentioned earlier, employees in Kuwait are entitled to two types of indemnity pay: 15 days’ pay for each year of service for employees who have worked less than 5 years, and 30 days’ pay for each year of service for employees who have worked more than 5 years.
4. Calculate the indemnity pay for the first 5 years of service: If the employee has worked for less than 5 years, you need to calculate the indemnity pay for the first 5 years of service.
   • To do this, multiply the employee’s last received wage by the number of days’ pay they are entitled to (15 days’ pay for each year of service). Then, divide the total by 26 to account for weekends and holidays (26 working days in a month).The formula is:

     Total indemnity pay for the first 5 years = (Last received wage x 15 x number of years of service) / 26

For example, if an employee has worked for 3 years and their last received wage is KD 500, the calculation would be:

Total indemnity pay for the first 5 years = (500 x 15 x 3) / 26 = KD 865.38

5. Calculate the indemnity pay for the remaining years of service: If the employee has worked for more than 5 years, you need to calculate the indemnity pay for the remaining years of service. To do this, multiply the employee’s last received wage by the number of days’ pay they are entitled to (30 days’ pay for each year of service). Then, divide the total by 26 to account for weekends and holidays. The formula is:

Total indemnity pay for the remaining years = (Last received wage x 30 x number of years of service) / 26

Kuwait Indemnity Calculation after 10 Years

Length of service: 10 years
Last received wage: KD 800

Since the employee has worked for more than 5 years, they are entitled to 30 days’ pay for each year of service for the remaining years (i.e., years after the first 5 years). Therefore, we need to calculate the indemnity pay for the first 5 years of service separately, and then calculate the indemnity pay for the remaining 5 years of service separately, and finally add the two together to get the total indemnity pay.

Indemnity pay for the first 5 years of service:

Number of years of service: 5 Days’ pay per year of service: 15
Total days of indemnity pay for the first 5 years: (5 years x 15 days/year) = 75 days
Subtract weekends and holidays: 75 days – (26 days/month x 5 months) = 49 days
Months of indemnity pay for the first 5 years: 49 days ÷ 26 days/month = 1.88 months
Indemnity pay for the first 5 years: 1.88 months x KD 800 = KD 1,504

Indemnity pay for the remaining 5 years of service:

Number of years of service: 5 Days’ pay per year of service: 30
Total days of indemnity pay for the remaining 5 years: (5 years x 30 days/year) = 150 days

Subtract weekends and holidays: 150 days – (26 days/month x 5 months) = 98 days
Months of indemnity pay for the remaining 5 years: 98 days ÷ 26 days/month = 3.77 months
Indemnity pay for the remaining 5 years: 3.77 months x KD 800 = KD 3,016

Total indemnity pay:

Indemnity pay for the first 5 years: KD 1,504
Indemnity pay for the remaining 5 years: KD 3,016
Total indemnity pay: KD 1,504 + KD 3,016 = KD 4,520 (USD 14,732)

Kuwait Indemnity Calculation after 3 Years

Assuming the employee’s last received wage is KD 500.
Total Service: 3 yrs.
Last Received wage: KD 500

For the first 5 years of service, the employee is entitled to 15 days’ pay for each year of service. Therefore, the indemnity pay for the first 5 years would be:

Total indemnity pay for the first 5 years = (Last received wage x 15 x number of years of service) / 26

Total indemnity pay for the first 5 years = (500 x 15 x 3) / 26

Total indemnity pay for the first 5 years = KD 865.38 (USD 2,821)

Video: How to compute your indemnity in Kuwait? Easy to understand Indemnity Computation for Expats

If you’re an expat working in Kuwait, it’s important to know how to compute your indemnity pay. Indemnity is a type of end-of-service benefit that you’re entitled to receive when you leave your job. It’s calculated based on the length of your service and the last wage received.

In this video, we’ll show you an easy-to-understand method to compute your indemnity pay in Kuwait. We’ll walk you through the step-by-step process and provide a sample calculation to help you better understand how it works.

Whether you’re planning to leave your job soon or just want to be prepared, this video is for you. You’ll learn everything you need to know about how to calculate your indemnity pay, including how to factor in weekends and holidays.

Frequently Asked Questions

1. What is Kuwait Labour Law?

Kuwait Labour Law is the legal framework that regulates the relationship between employers and employees in Kuwait. It covers various aspects of employment, including wages, working hours, leave entitlements, and end-of-service benefits like indemnity pay.

2. What is indemnity pay?

Indemnity pay is a type of end-of-service benefit that employees are entitled to receive when they leave their job. It’s calculated based on the length of their service and their last received wage.

3. How is indemnity pay calculated?

Indemnity pay is calculated by multiplying the number of years of service by the last received wage and a percentage factor. For the first 5 years of service, the factor is 15 days’ pay for each year. After 5 years, the factor is 30 days’ pay for each year of service.

4. How can I calculate my indemnity pay online?

There are several online indemnity calculators available that can help you calculate your indemnity pay. Simply enter the required information, such as your length of service and last received wage, and the calculator will generate an estimated indemnity amount.

5. Is indemnity pay mandatory in Kuwait?

Yes, indemnity pay is mandatory in Kuwait for employees who have worked for more than one year.

6. When am I eligible for indemnity pay?

You’re eligible for indemnity pay if you’ve worked for your employer for more than one year and you leave the job voluntarily or if your employer terminates your contract.

7. Can my employer refuse to pay indemnity?

No, your employer cannot refuse to pay indemnity if you’re eligible for it. Failure to pay indemnity is a violation of Kuwait Labour Law, and employers can face penalties for non-compliance.

8. Is there a limit to the amount of indemnity pay I can receive?

Yes, there is a limit to the amount of indemnity pay you can receive. The maximum indemnity amount is capped at 15 years’ pay, regardless of how long you’ve worked for your employer.

Summary

In conclusion, it’s crucial for OFWs working in Kuwait to be aware of their rights and entitlements, including end-of-service benefits like indemnity pay. Understanding the provisions of the bilateral labor agreement between the Philippines and Kuwait, as well as Kuwait Labor Law, is essential in ensuring that OFWs receive fair compensation for their work.

By using online indemnity calculators and familiarizing themselves with the calculations, OFWs can confidently calculate their indemnity pay and ensure that they receive what they’re entitled to. With this knowledge, OFWs can protect their rights and make informed decisions about their employment in Kuwait.

READ NEXT: Tips on How to Find a Job in Kuwait