Key Provisions of the New Resolution
Needs-Based Work Permits
- Employers seeking to hire foreign workers must obtain work permits issued by PAM after a thorough needs assessment.
- An administrative fee of 150 Kuwaiti dinars (approximately USD 490) will be charged for each work permit.
Transfer Fees
A streamlined process for transferring employees between employers is introduced. Employees can transfer to another company within three years for a fee of 300 Kuwaiti dinars (approximately USD 980).
Exemptions
Certain entities are exempt from these new regulations, including:
- Government-owned companies
- Healthcare facilities licensed by the Ministry of Health
- Educational institutions
- Foreign investors approved by the National Promotion Authority
- Sports clubs
- Public benefits associations
- Cooperative societies
- Labor unions
- Charitable endowments
- Licensed agricultural plots
- Fishing activities
- Livestock operations
- Commercial and investment real estate
- Industrial facilities
- Small industries
Labor Market Challenges
Resolution No. 3 of 2024 aims to address labor shortages in sectors like construction and contracting, where wages have surged dramatically. By allowing direct recruitment from abroad, the government seeks to eliminate the residency trade and provide businesses with the necessary workforce without inflating labor costs.
Benefits of the New System
- Reduce Labor Costs and Prices: Needs-based hiring should control labor costs and lower prices for goods and services.
- Targeted Recruitment: Businesses can recruit foreign workers based on actual needs, reducing internal transfers.
- Combat Residency Trade: The new system aims to eliminate illegal residency trading.
- Address Labor Shortages: Streamlined recruitment processes should ease shortages in critical sectors like construction.
The implementation of this new system in June 2024 is expected to bring significant changes to Kuwait’s labor market. By focusing on needs-based recruitment and stricter regulations, the government aims to create a more efficient and transparent system for both employers and foreign workers.