Kuwait moves to standardize salary deductions by court orders

Arab Times

3 days ago

KUWAIT CITY, Aug 7: In a recent brainstorming session aimed at resolving procedural challenges, the Enforcement Department at the Ministry of Justice met with banking officials to discuss the difficulties banks face in implementing judicial orders related to the garnishment of employee salaries and wages.
Sources familiar with the matter said that representatives from various banks presented the specific issues they encounter when executing salary withholdings ordered by the courts. The meeting sought to gather feedback from financial institutions in order to develop a unified banking mechanism that would standardize salary garnishment procedures across all banks in Kuwait.
Although garnishment orders issued by the Enforcement Department typically state the required percentage to be deducted — within the legally permissible range — sources noted that procedural complications still arise. These inconsistencies often prevent banks from handling similar cases in the same manner, creating operational challenges.
One of the key issues discussed was whether the garnishment should occur before or after the deduction of existing bank loan installments. Questions were also raised about how to treat additional salary components such as labor support, rent allowances, social assistance, and Kuwait Credit Bank loan repayments. In some cases, banks have withheld the entire salary amount to comply with the garnishment, only to later release exempted portions after the customer intervenes.
The discussions underscored the importance of adhering to Article 216 of the Civil and Commercial Procedures Law, which states that garnishments must fall within the legal limits—between 25% and 50% of the employee's permanent salary, depending on the nature of the debt and the debtor's employment status. This is to ensure that the employee retains a portion of their income and to prevent over-withholding.
It was also emphasized that court-ordered alimony takes precedence over all other forms of debt, including government-related obligations. In the event of a conflict between alimony and government debt, alimony is to be prioritized. Only after satisfying both obligations, and if a remaining margin exists, may further deductions be made up to the legal ceiling of 50%.
Sources added that during the session, bank representatives also highlighted several technical challenges and called for clearer guidelines and improved coordination. Work is ongoing to address these concerns and remove ambiguity, with the goal of creating a streamlined, consistent process for handling court-mandated wage garnishments across all financial institutions.
Another proposal raised during the meeting involves shifting the garnishment responsibility from banks to the employer, the salary source. Under this system, court orders would be sent directly to the employer, who would withhold the required percentage before transferring the remaining salary to the employee's bank account. However, sources confirmed that no final decision has been reached on this proposal.
Salary garnishments, enforced via court order, are intended to protect creditor rights and ensure the repayment of outstanding debts. As such, participants in the session agreed on the necessity of uniform implementation without delays or procedural discrepancies.