PAM sets 10 pct ceiling on salary deductions for employer loans
. . . labour law caps total salary deductions at 25 percent
The Public Authority for Manpower (PAM) has reminded employers and workers of the legal provisions governing wages and financial deductions, stressing the importance of complying with Kuwait’s Labor Law to safeguard workers’ rights and maintain stable employment relationships.
In an awareness notice, the authority clarified that under Article 28 of the Labor Law, the wage agreed upon in an employment contract cannot be reduced throughout the contract period.
PAM explained that Article 59 (A) limits deductions from a worker’s salary to settle debts or loans owed to the employer to a maximum of 10 percent of the worker’s wage. The provision also prohibits employers from charging any interest on such loans or debts.
According to Article 59 (B), the total amount that may be seized, assigned or deducted from a worker’s salary to settle debts is capped at 25 percent of the wage. This includes debts owed to the employer, while deductions for alimony obligations are given priority when competing claims arise.
The authority said these legal safeguards are intended to strengthen workers’ protection and ensure that employers comply with the legislation governing labour relations in Kuwait.
