Kuwait Suspends Company Files Over Salary Transfer Violations

In a firm move to enforce Kuwait’s labor laws, official sources confirmed that the recent suspension of several private sector company files is due to violations concerning employee salary transfers. The Public Authority for Manpower (PAM) is implementing these measures under updated private sector labor law regulations, which require employers with five or more workers to transfer salaries through approved banking channels.

This regulation is designed to improve transparency and ensure timely wage payments to employees.

Phase One Targets Non-Compliant Employers

Authorities explained that this is part of a phased enforcement strategy. The first phase involves suspending companies that have failed to adhere to salary transfer obligations. These suspensions are precautionary measures intended to prompt employers to comply and regularize their payroll systems.

PAM will continue conducting comprehensive monitoring to ensure ongoing compliance across all sectors.

Strict Implementation Under Ministerial Directives

These enforcement actions are being carried out under the directives of First Deputy Prime Minister and Minister of Interior Sheikh Fahad Al-Yousef, and in accordance with Cabinet decisions aimed at protecting workers' rights.

Kuwait is determined to uphold its international commitments concerning labor rights and human dignity, particularly in the treatment of expatriate workers.

Workers’ Rights Remain Protected

Authorities emphasized that suspending a company’s file does not affect the legal status of current employees. Existing workers can still have their work permits renewed or be transferred to other compliant employers. This provision ensures that employees are not penalized or left in violation of residency laws due to employer misconduct.

Suspension Limits New Hiring Until Compliance

The suspension process halts all new hiring activities and puts a pause on the workforce needs assessment for the affected companies. To lift the suspension, employers must take corrective actions by:

• Transferring employee salaries via bank
• Justifying any missed transfers within PAM’s Ashal system

This ensures better documentation and accountability, contributing to the long-term stability of Kuwait’s labor market.