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US Contractors – Your legal rights and the Kuwait Labour Law

I’m posting this for a good friend of Desert Girl who is very well versed in the legal rights of US Contractors in regard to the Kuwait Labor law. There are a lot of contract changes taking place, a lot of new employees arriving in Kuwait, and a lot of old ones leaving. It’s best to know your rights upon accepting a new position as well as upon ending your contract whether it be through termination or resignation.

Please feel free to reach out to her should you have any questions.


 

I am hearing more and more each day about the break time gossiping and moaning that surrounds the work contracts here in Kuwait.  Most of the gossiping is done by Denny Crane’s thinking they are Legal Eagles and just cherry picking what they hear from one person and another then combining a mish mash of complete inaccurate information.  So, on that note I would like to just explain a few simple terms to you guys:

  • If you have a Visa 18 you fall under the Kuwait Labour Law of February 2010 – A copy is here for you to read.
  • The Kuwait Labour Law supersedes any work contracts that you have with your employer
  • If you decide to take Legal Action against your employer to recoup any overtime, indemnity or holiday pay outstanding you can sue your employer through the legal system in Kuwait without any retribution from them – once a case is filed you are protected . You must realise that your employer can not sack you because you are taking them to court – if they try, this works in your favour and substantiates your claim even more.
  • You can file a case up to 1 year from leaving your employment – but this takes more time to process.
  • As an American citizen even signing a contract outside of Kuwait in advance to your arrival here – you are still bound by Kuwait laws.
  • You might want to check out the following site – this is the big buzz word in the US at the moment – Human Trafficking – yes guys – you come under Human Trafficking by your own employer – quote: (5)(i) Using misleading or fraudulent practices during the recruitment of employees or offering of employment, such as failing to disclose, in a format and language accessible to the worker, basic information or making material misrepresentations during the recruitment of employees regarding the key terms and conditions of employment, including wages and fringe benefits, the location of work, the living conditions, housing and associated costs (if employer or agent provided or arranged), any significant costs to be charged to the employee, and, if applicable, the hazardous nature of the work;

(ii) Using recruiters that do not comply with local labor laws of the country in which the recruiting takes place;  https://www.acquisition.gov/sites/default/files/current/far/html/Subpart%2022_17.html

 

  • The Legal procedure here is simple and painless:
    • You find a good bi-lingual lawyer – please understand only Kuwaiti Lawyers can stand before the judge in Kuwait
    • You Sign Power of Attorney ‘Tawkeel’ – this enables your lawyer to act on your behalf – this can be done in about 30 minutes
    • You discus your issues – take all forms of paperwork including proof of any overtime sheets or payslips that you have
    • The lawyer will look over all the documentation and work out how much money is owed to you what you can claim back through the courts
    • You agree on a fee – this is usually around KWD 1,500 dependant also on complexity of the case and if you are leaving you must appreciate contact through international means (this might push the fee up to KWD 2,000) also, they will charge a recovery fee of around 7% – but, the monies collected on your behalf will be sent directly to you once received. Expensive ? Yes and No – once your case is filed you need do nothing – the Lawyers will take over everything – and monitor every aspect of the case for the duration – considering most Lawyers have a normal flat rate of KWD 50 to open a file – and charge anywhere between KWD 150 – 300 per hour consultation – looking at this you will realise it’s a justifiable cost. Some may charge you less than this – but you have to question is the firm experienced enough and do they have native speaking English staff? But, on the other hand if they try to charge you over KWD 2,000 you are paying waaaay too much.
    • Once in agreement to everything a contract is signed.
  • The legal process once you decide to peruse your case through the courts in Kuwait is quite simple:
    • Your file is presented to the Ministry of Social Affairs and Labour ( MOSAL – Sha’oon this is the local name given) where it is registered and a case number is given.
    • Your file will be given to a Sha’oon Manager – he will be the one looking at all the evidence and collating the information from both sides to give his recommendations to court.
    • Your employer will have 3 chances to attend an informal hearing with him in the Sha’oon offices.
    • If your employer does not attend 3 times then the case gets automatically sent to the Civil Court.  In all honesty,  it’s a case of sit back and wait – usually takes about 6 months for it to get a hearing date – Kuwait Judicial system is paper driven and as we all know every man has his stamp !
    • If your employer does decide to turn up at either of the 3 appointments given to them by the Sha’oon they have a right to present any documentation that they have – this can also give opportunity to settle out of court – they will be asked would they like to settle out of court – if this happens and they agree then terms and conditions will be set and an agreed amount will be negotiated and a payment date set out.  This will be legally binding !!!
    • Even if you decide you want to leave Kuwait during this process – your lawyer will fight on your behalf for your rights. Just make sure you have a good lawyer that holds your back !!!

Contact number is 1810011 / 9872 8900  if you want to discuss it further.  The initial consultation is free.
Just to let y’alls know:  You can’t go back to the US and fight it there.  There is no jurisdiction for the first round.  You have to file a case in Kuwait and based on that outcome, use the Kuwaiti case as evidence in your subsequent case filed in the US (if you choose to do that).  There was a recent class action case against an American contracting firm working in Kuwait where the plaintiffs filed in the US.  The US judge threw it out as the Kuwait Labor Law does not apply in the US.

Published inAmericaEducation

15 Comments

  1. David David

    I would love to talk with you one on one. Not here in the open.

    • American Girl American Girl

      Hi David, I have approved your comment but edited out the information you might not want shared here. I suggest you call the phone number listed in this post and share the information with her. She will gladly take the information from you and let you know if there’s anything she can do to help.

      Wishing you all the best.

  2. Linda Linda

    Hi, I have read several of your different blogs that you have posted over the years about US Contractors working in Kuwait and I have several questions that are currently effecting a friend of mine that is in this situation now. I am hoping that you will be able to provide some insight on this as his Sponsor ad the HR dept of the US Company do not seem to want to answer and insinuated termination because of asking.

    Here is a little background – Once retired he accepted a basic employment contract stating that he was going to be assigned to a US Base in Kuwait providing support to the US military there as part of a DoD contract for 1 year from November 2015 to November 2016. This contract laid out what he was to be paid hourly, OT rate based upon local standards, holidays would be US, where the pay was going to be made from and into a local US account and any labor disputes would be governed by courts in the US. He would be provided housing, meals and hazard pay bonuses for living conditions and location. He lives on the US Military installation, providing direct support to the US Troops, and does not drive anywhere except to the medical office and the local sponsors office when required. .

    Once he arrived, the story changed, he now has to have a sponsor, required to obtain a residency visa and is require to open a local bank account for a random amount each month, there was even talk of DNA fingerprinting being required. He remained on a “travel’ Visa for almost 7 months,. He was informed that his year contract was not for a year but for 6 months, from November 2015 till March 2016 and was required to fill out another DoD form for being Kuwait till November 2016, Finally was provided his residency visa in March 2016 and then later received a Civil ID and this is when everything began to be enforced.

    He has been provided a “Salary Certificate” stating that he is a technician and is paid less than half his actual contracted salary. All of the emails that are sent over referencing various articles that were seen in the local Arabic Times newspaper and how they will effect them. When questions are asked for validation and clarification of the effects this would have on tax exempt status, security clearance,..etc., he is dodged on every turn and told you “just have to do it”. Another employee reached out to the US HR office and has been threatened with termination if the local bank account is not opened. My friend has not reached out to the US HR department for the company he works for but has asked his local supervisor these questions and they refuse to answer the questions. He has reached out to a lawyer through the US Embassy in Kuwait but has not received a response yet.

    Here are the questions we have and are hoping that you can provide some general insight. We understand that you are not a lawyer and are looking at your answers as general guideline for directions to look.

    1. Is he required to have the local/foreign bank account?
    2. When does the local/foreign banks accounts need to be opened by? He will leaving the country in November 2016
    3. Is it legal for the Sponsor to provide a document stating his job description and rate of pay is different than what he is being paid for the local bank account?
    4. What is your interpretation of “This Salary Certificate is issued upon request of myself with no liabilities towards the company?”
    5. What are the general effects of having a local/foreign bank account for US Tax exempt purposes for working and being out of the US for 12 months?
    6. How will having a residency Visa and Civil ID effect security clearances after this contract expires and he returns home?

    If you can provide any insight, even in general, it would be greatly appreciated!

    • American Girl American Girl

      Hi there. I’ve provided some answers below which can hopefully provide you some insight. You may also want to reach out to a legal team located in Kuwait if you want more details or information. I am not an Attorney.

      1. Is he required to have the local/foreign bank account? Yes. In order for a person to be sponsored in Kuwait they must be paid a ‘salary’ in local currency into a local bank account. This account will just sit there and the salary amount listed on his Arabic employment agreement (salary certificate) will be deposited into that account every month, then withdrawn by the sponsor, then deposited again on pay day. Your friend will simply sign a paper to open this account in his name but will not access it. Sound shady? Well, it’s just the way things are done there.
      2. When does the local/foreign banks accounts need to be opened by? He will leaving the country in November 2016. The account should be opened upon him being issued a Civil ID.
      3. Is it legal for the Sponsor to provide a document stating his job description and rate of pay is different than what he is being paid for the local bank account? Legal? Hmmm, I can’t really tell you how ‘legal’ it is. But I can tell you it’s common practice. We did it in the past as a way to prevent employees from obtaining credit and creating problems for themselves. Eventually companies started doing it as a way to reduce the amount of indemnity owed at the end of service. However, the amount shown on that document is the amount that will be deposited, withdrawn, and re-deposited into that local bank account.
      4. What is your interpretation of “This Salary Certificate is issued upon request of myself with no liabilities towards the company?” That statement just means if your friend uses that salary certificate as a way to obtain credit, buy a car, etc. the company will not be held liable for their debt.
      5. What are the general effects of having a local/foreign bank account for US Tax exempt purposes for working and being out of the US for 12 months? That local account should not have an affect on his US taxes. However, staying out of the country for less than 330 days will. It’s important, if they want to remain tax exempt, that they stay out of the US for the required period of time.
      6. How will having a residency Visa and Civil ID effect security clearances after this contract expires and he returns home? There should be no issues regarding the security clearance. Obtaining residency is a common practice when Americans work abroad.

      • Linda Linda

        Hi! Thank you for your response it was very helpful!

        I need a little clarification about the bank account and the money deposited into it. You state that it is common practice for the sponsor to be the one accessing the account for deposits and withdrawals for each pay period and the employee, account owner, is not suppose to access it. Have you heard of exceptions to this that the employee would be accessing the account and transferring the pay to their US account each pay period? Also, if the employee is not the one accessing the account, who is responsible for the account, the sponsor or the employee’s name that is on the account?

        The reason I am asking this is that the US company is stating that part of their pay will be deposited into the Kuwait account as an advance to be deducted from their normal check. They are providing additional funds each pay period to pay for transfer/conversion fees.

        I’m sure you can understand how confusing this is. Any and all information you can provide is greatly appreciated! Thank you, again!

        • American Girl American Girl

          If they are dividing the employees salary and depositing half into the Kuwait account and the other half into a US account, then the employee would have access to the Kuwait account. I’m going to assume the amount they’re depositing into that Kuwait account is the amount they’ve written on the salary certificate.

          Once that money is in the Kuwait account the person who owns the account (the employee) can do a wire transfer into the US account.

          It sounds to me like this employer and sponsor is not doing the ‘deposit/withdraw’ thing, but instead, are depositing just the small amount on the salary certificate. In that case, the person who has their name on the account (the employee) would be responsible for this account; opening, closing, etc.

          Hope this helps.

          • Linda Linda

            I appreciate the time you have taken to answer all of my questions so quickly. As you stated, it is shady! About as shady as it can come! All of your information has been super helpful to gain a basic understanding the local laws to work in Kuwait.

            Thank you again!!

  3. David David

    Many of the American companies are not telling employees about the Kuwait account. The sponsor opens the account without the knowledge of the employees.

    I recently heard from someone on Arifjan that a certain company was telling their employees that they should have all their money going only to an American stateside account because Kuwait was going to tax them. They were told to go to human resources and have it change right away.

    KBR told me when I joined that they would not hire me if I did not give them a stateside account and that it was.illigal for me.to have a Kuwaiti account. I showed her my Gulf Bank and CBK Bank cards and told her she was lying. They have not followed overtime, holiday pay, sickleave pay, Ramadan overtime and even had the balls to force me to sign a salary statement of 250 kd per month. Let’s not get into the fact they have had people on 14 visit visas working in Kuwait since October 2014! I have also know people to be on expired visas being arrested and deported from Kuwait for this at the company. Not mention going to the airport and paying the fines and doing the rounds round trip.to Bahrain and upon return being deported for violation of Kuwait law.

    I trust none of them. Look up the Kuwait labor laws online. You should also be aware of DFARS 252.222-7002. It is in all contracts on the bases we work on here in Kuwait. Google it.

    You can do a FOIA request at DCMA on Arifjan and read the contract yourself. The contract number is on you LOA folks.

    • American Girl American Girl

      There is no such thing as income tax in Kuwait.

  4. David David

    What I am seeing done is this. The sponsor deposits the amount on the salary statement. The rest is sent to the stateside account. The sponsor then sends the rest of the money to the stateside account. A deposit must be made into an account in Kuwait by Kuwait law.

    I know of people like myself that had the entire salary deposited into my Kuwait account. I did this for 2006 to 2014. I know people that only had $500 deposited into the Kuwait account and the rest sent to the states. I also know people that told me they never had a Kuwait account and all their money went to the states. Some of these folks that thought all their.money went to the states saw bank transfers or a third addition transfer into the stateside accounts from a Kuwait account or company they did not recognise and then found out they had a Kuwait account they never.got access to.

    It’s a dirty world folks.

    • American Girl American Girl

      Unfortunately, when you’re an expat working in any foreign country you’re subject to their rules, laws, and operating procedures — regardless of how shady it may all seem. On a positive note, you do have the option to return to your home country, find a job, and take confidence in the US (or your home country) Labor Laws.

  5. Brian Brian

    Some questions for anyone who might know. First a quick background on my situation.

    Was in Kuwait 2011-2015. Was let go due to funding issues and given 72hrs to leave by my employer. Found a lawyer with the help of the Desert Girl website. Got power of attorney to handle my case (no notice/indemnity), provided all necessary paperwork before leaving and case was filed in May of last year.

    Fast forward to today, lawyer says it is with the experts right now and we are waiting for a decision in September.

    So for my questions:

    1) What happens after the experts give their decision?
    2) Is a year and a half normal for this process? Sometimes I feel like I’m getting the runaround by my lawyer and other times not.
    3) Is there a website where I can check the progress of my case if I had a case number?

    Thank you.

    • American Girl American Girl

      Hi Brian. I probably don’t have answers you’re interested in hearing but here goes;

      1) A decision will be given (by a Judge if it’s in court). Either you will win or your case will be dismissed. If you win, chances are, nothing will happen. I’ve known a few people to win their cases but never known anyone to actually receive any pay out.
      2) Very normal. It could go on for years and years. Rest assured, you ARE getting the runaround.
      3) No. Unfortunately.

      Best of luck. Cut your losses and call it a day.

  6. Terrence Smith Terrence Smith

    Would you please contact me by email? It’s very important.
    Thank you.

    Ted

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