Lack of private sector support may delay strategic payroll alternative

CSC issues new regulations for expats’ end-of-service benefits

KUWAIT: The strategic payroll alternative, anticipated to be ready by the end of the current fiscal year in early April, may not be implemented in the first half of this year. The government perceives it as lacking support for the private sector.

Ministerial sources reveal that the current interim government lacks a clear vision for this legislation, suggesting that a decision on its fate rests with the incoming government. Informed sources note that technical teams within the ministerial economic committee have formulated recommendations aligning with a former finance minister’s stance. They emphasize that the strategic alternative aims not only to address salaries but also to link compensation with employee performance.

The recommendations aim to gauge employees’ cognitive and professional development, with the goal of not only maintaining Kuwaitis’ interest in working in the private sector but also increasing their presence at the expense of expatriates. Additionally, the strategic alternative aims to avoid inflating the government’s functional apparatus and hindering the sustainability of state public finances, potentially impacting the launch of capital-intensive projects.

Sources indicate that the parliamentary finance committee has postponed discussions on the strategic alternative until the formation of the new government and a subsequent meeting with the minister of finance. The technical report underscores the need to address labor market imbalances before considering the strategic alternative to prevent exacerbating the financial crisis and destabilizing the labor market, especially given the presence of numerous unemployed Kuwaiti youth unable to secure positions in government agencies.

To mitigate the financial crisis, sources stress the importance of promoting the private sector as a preferred work environment. The recommendations also propose enhancing job benefits for Kuwaitis in the private sector, such as reducing retirement age or duration, extending annual leave and introducing unemployment insurance. If approved, the strategic payroll alternative should apply universally to both existing and new employees entering the labor market after the law’s implementation.

Meanwhile, the Kuwaiti Civil Service Commission has intimated government agencies about the new rules and regulations for the payment of end-of-service benefits to non-Kuwaiti employees, based on numerous communications from the authorities regarding the issue.

The rules and regulations included: a copy of the end-of-service gratuity form issued by the integrated systems, a clearance issued by the ministry of Interior “Judgments Enforcement Department” for the case required to pay end-of-service benefits, as well as a clearance issued by the ministry of Electricity, Water and Communications.

The conditions also included a copy of the contract concluded for the case for which disbursement is sought, and a copy of the decision issued for separation from service. The commission pointed out that they attached a statement of career progression and details of the comprehensive monthly bonuses, provided that they include all increases granted during service, and the entry of all financial and functional data on the integrated systems of the civil service system.