Police responded to the protests with tear gas and batons.
Shahriar Kader Siddiky, labour counsellor of the Bangladesh Embassy in Kuwait told The Daily Star, a Bangladeshi newspaper: "I have received reports that special forces of Kuwaiti police have made some arrests".
Siddiky did not give a number of how many workers were arrested.
Hundreds of workers have gone on strike in recent months complaining of non-payment of salaries or delays in obtaining their wages as well as poor working conditions.
"The problem is that I work eight hours for a pay of $75," Mohammed Sheikh, a Bangladeshi labourer, said.
He said that his company pays him a monthly salary, but takes $10 to pay for the work permit.
"I'm always paying money."
Al-Watan, a Kuwaiti newspaper, carried photographs of labourers holding a list of demands that included an increase in salaries and a holiday every two years provided with paid aeroplane tickets.
'Just demands'
However, the men apparently agreed to return to work after the government, in a statement, pledged to ensure that "contracts made between companies and workers are honoured," and that it will back the "just demands" of workers, according to KUNA state news agency.
However, it also warned that it "will not tolerate disturbances and chaos caused by any group of people," adding that those who instigated trouble would be deported.
Abdullah al-Roumi, the labour ministry's deputy, said he would present a draft law to scrap Kuwait's sponsorship system, under which expatriates must be sponsored by a local employer to get a work permit.
The strike in the oil exporting country came against a backdrop of soaring inflation that hit 11.4 per cent last April.
In the world's seventh largest oil exporter, high housing and food costs continue to spur price rises.
About 200,000 Bangladeshis work in Kuwait, mostly as cleaners and in other low-paid jobs.
Expatriates, comprised mainly of Asians and Arabs, account for around two thirds of Kuwait's 3.2 million population.