Temporary draft law to allow employers to cut salary up to 50%

Tuesday, June 2, 2020

The government has referred a new draft law to the Parliamentary Finance Committee, which addresses the effects of "Corona" on the labor market. According to Al-Rai Arabic newspaper report, the draft No. 2020/86, companies can come to an agreement with their employees for a salary reduction of up to 50% as businesses struggle to stay afloat during the coronavirus crisis.

The temporary law will be in effect during the period of measures taken to limit the spread of the corona virus, and will end once the measures are no longer needed, Al-Rai newspaper added.

According to the draft law, the Council of Ministers will approve the minimum wage during the period of halting businesses. This also allows for employers to agree with the employees for a salary reduction for the work period by a maximum of 50 percent during the corona virus crisis.

The actual number of working day need to taken into consideration to decide on the paid wage.

All employee wages are calculated based on their salary due to them before it is reduced within the work period. Support is given as well as unemployment allowance for those Companies who redo their business plans to protect Kuwaiti national employment.

The provisions of the first article of this law is only applicable during the period of the coronavirus preventative measures that the Kuwait has undertaken. The law will no longer be followed once the coronavirus health measures cease.

The law aims to maintain a balance in work and business relations in the private sector. Hence, the law is temporary in nature with these circumstance and to fill some legislative need related to dealing with the impact of this pandemic on businesses and enterprises in Kuwait.

s