Hire in Kenya
Here’s where you get started with human resources best practices and hiring in Kenya.
Kenyan Shilling (KES)
Key Country Facts
Kenya, officially the Republic of Kenya, is a country in Eastern Africa. Kenya’s independence was proclaimed in 1963 and the Constitution adopted. Today, it is a presidential representative democratic republic with a multi-party system. Its Indian Ocean coast provided historically important ports by which goods from Arabian and Asian traders have entered the continent for many centuries.
Kenya, covering a total of 580,367 square kilometers, is bordered by Ethiopia to the north, South Sudan to the northwest, Somalia to the east, Uganda to the west and Tanzania to the south. The country borders the Indian Ocean to the southeast.
Kenya’s climate varies widely, from cold snow capped mountain tops to temperate climates in western and rift valley counties and dry arid to absolute deserts. The “long rains” season occurs from March or April to May or June. The “short rains” season lasts from October to November or December.
The motto of ‘Harambee’ (Swahili for “pulling together”) has been stressed by Kenya’s government since the country’s independence, even as the culture is made up of multiple traditions. Notable populations include the Swahili on the coast, several other Bantu communities in the central and western regions as well as Nilotic communities in the northwest.
Freedom of religion is guaranteed by Kenya’s constitution. The majority of Kenyans are Christian (85.5%), of whom 53.9% are Protestant and 20.6% are Roman Catholic. Islam is the second largest religion, comprising 10.9% of the population. Indigenous beliefs are practiced by 0.7% of the population and 0.13% are Hindus. The non-religious make up 0.7% of the population.
The two official languages are English and Swahili, with English widely spoken in business, education and government. Kenya’s various ethnic groups usually speak their mother tongues in their own communities.
Kenya HR at a Glance
Kenya’s employment and labor relations legislative framework is relatively new. The statutes are just over a decade old, following the promulgation of the Constitution in 2010. These statutes have significantly changed labor law in certain aspects and greatly enhanced the rights of employees.
Employment relations in Kenya are regulated by a number of sources: constitutional rights, individual labor contracts as well as the statutory rights and rights set by collective agreements (CBAs).
The statutory framework governing employment and labor relations in Kenya is set out in five main statutes:
- Employment Act
- Labor Relations Act
- Labor Institutions Act
- Work Injury Benefits Act
- Occupational Health and Safety Act
An employment contract, which does not specify a fixed period of duration, is considered to be for an unlimited period of time. It can be terminated by notice of either party. However, in the organized sector, collective agreements which give workers tenure essentially limit the employers’ ability to discharge and end the employment contract.
Other types of contracts:
- Casual employment
- Piecework employment
- Apprenticeship contracts
In Kenya, both oral and written contracts are recognized. A contract for a period of more than three months should be in writing. If a contract is written, there are some basic requirements. For example, it must include the following:
- name and age of the employee
- permanent address of the employee
- name of the employer
- job description
- commencement date of employment
- duration of the contract
- workplace and hours of work
- remuneration and frequency of payment
- leave entitlement
These mandatory particulars should be agreed upon not later than two months after the start of the employment relationship.
An ‘employee’ is defined as a person employed for wages or a salary and includes an apprentice and indentured learner. A ‘contract of service’ is a binding agreement – whether oral or in writing, expressed or implied – to employ or to serve as a worker for a period of time. This definition includes contracts of apprenticeship as well as indentured learnership.
It is a legal requirement for certain contracts of service to be concluded in writing. These include contracts:
- for a continuous period of six months
- which are not continuous but for which the periods still add up to six months.
- in which the task to be performed can last for six months.
If a contract is concluded in writing, it must be accompanied by a signature or a fingerprint of the employee signifying she or he has agreed to its terms. There must also be an additional witness (not the employer). It is the duty of the employer to make sure the contract is written when required by law.
It is possible to adopt flexible work arrangements between the employer and the employee. The work schedule can be structured to fit in this flexible time arrangement. With the COVID-19 pandemic, flexible and agile work arrangements have been embraced by the majority of workplaces.
Employers can request background checks for:
- Criminal records – A certificate of good conduct can be requested from the Directorate of Criminal Investigations.
- Medical history – Employers can ask potential employees to undergo medical tests, with the consent of the employees.
- Drug screening – This can be requested if it is relevant to the job in question.
- Immigration status
Probation Period/ Trial Period
A probationary period must not be more than six months. It can be extended for a further period of not more than six months with the agreement of the employee.
During the probationary period, either party may terminate the contract by giving at least seven days’ notice. Seven days’ wages in lieu of notice can also be offered.
The statutory maximum working hours is 52 hours per week, with 1 mandatory rest day in every 7 day working period. However, common practice is 45 work hours spread over 5 days.
Overtime is remunerated at the minimum rate of 150% of the normal hourly rate if the overtime is on the normal working days. The rate is 200% of the hourly rate if the overtime is on gazetted public holidays.
Management employees are not usually entitled to overtime. Their contracts will specify such provisions.
Employment records should be kept for a minimum period of five years following the termination of the employment.
Bonuses and the 13th month salary are not mandatory in Kenya. These can be included in contracts or CBAS. However, this is entirely up to the employer and the employee to negotiate.
Termination of employment has to be for just cause or valid and fair reasons. For example, termination can be executed if it is related to the employee’s conduct, capacity and compatibility or if it is based on the operational requirements of the employer. An employee retains the right to be heard prior to termination of employment due to misconduct, poor performance or incapacity.
Different procedures are applicable depending on the grounds and mode of termination.
The mandatory procedure for termination on account of poor performance, misconduct or incapacity is as follows:
- The employer must give the reason it is considering terminating the employment relationship.
- The employer must provide an opportunity to the employee to be heard before executing the termination, where the employee is entitled to have a fellow employee or union representative present during the show-cause hearing.
For termination due to poor performance, an employer should have a structured system of reviewing an employee’s performance and allowing the employee to improve over a reasonable period of time. This should happen before a decision for termination is made. A period of two to three months is considered a reasonable period to place a poor performing employee on a performance improvement plan (PIP).
For termination due to illness or incapacity, there are two key considerations:
- An employer must make an effort to accommodate a sick or ailing employee by offering alternative work before termination on medical grounds, including reassignment to light duties or modifying the working environment.
- Employers must exercise due care and sensitivity in the process of termination for incapacity or sickness.
For redundancies, it is required for two notices to be issued:
- First, the employer must provide notice of intended termination to the affected employees or a union where applicable. This must happen at least one month prior to the date of intended redundancy. Consultations are required to be conducted in this period.
- The employer must provide notice to the labor officer at least one month prior to the date of intended redundancy.
Payment in lieu of notice – this is remunerated upon the completion of the 30 days’ notice of intended redundancy. The employee can alternatively serve notice during this time, rather than being paid in lieu.
Mutual separation or termination agreements are permissible in Kenya. There are no statutory provisions governing such agreements. What does apply are the common law principles of what constitutes a valid and enforceable contract. Mutual separation agreements usually have provisions whereby the employee agrees to waive, release or discharge the employer from any liability arising from the separation in consideration of the employee receiving a separation package.
There is no specific protection in Kenya against dismissal for particular categories of employees (e.g. pregnant employees, employees on maternity leave, termination on account of illness or incapacity).. However, employers are at risk of being accused of discrimination in these cases, which is prohibited in the statues and in the Constitution. Thus, employers should remain cautious in this respect.
Notice periods are determined by the frequency of wage payments:
- Daily – Contract can be terminated at the close of the day without notice to either party.
- At intervals of one or two weeks – contract can be terminated with a week’s notice given in writing.
- At intervals of one month or more – Contract can be terminated by giving 28 days notice in writing.
The law is not one sided. In the case that an employee quits without notice, they are to compensate the employer for the duration they should have served notice as well.
Redundancy/ Severance Pay
Severance pay in Kenya, is equivalent to 15 days’ basic wages for each completed year of employment.
Gratuity or service pay is the amount of money paid to an employee by an employer whose contract of service to pay wages periodically at intervals of one month or exceeding one month has been terminated. This can be a contractual provision or as a result of a statutory obligation. Gratuity or service pay is offered, as per the Employment Act in Kenya, to any employee who is not a member of a pension fund or N.S.S.F as a benefit following termination of their employment.
Final pay depends on the mode of termination. An employee whose employment is terminated by payment in lieu of notice is entitled to that payment in addition to the salary earned up to the date of termination. They should also be paid out for accrued leave not taken.
An employee summarily dismissed from employment is entitled to salary earned up to the date of dismissal and any accrued leave not taken.
Post-Termination Restraints/ Restrictive Covenants
The general legal position in Kenya is that restrictive covenants are not enforceable. Such a restriction can be enforced if found to be reasonable. However, the labor courts are generally reluctant to enforce such clauses.
Some of the main reasons given for this reluctance is the weak position of the employee in terms of bargaining and the requirement that may exist for an employee to take employment in order to earn a living.
If an employment contract specifies a fixed-term of employment, the contractual relationship is automatically terminated at the end of this period. This will not be considered a resignation or a dismissal. There are no limits on how many times a fixed term contract can be renewed.
Employees on fixed term contracts enjoy all the rights of an employee working on permanent terms, except those that are excluded explicitly (such as entitlement to pensions) or by the nature of a short-term assignment (such as annual leave).
Tax and Social Security
Personal Income Tax
Income tax for individuals refers to the tax on world-wide earnings, which can be divided into tax on non-employment earnings (such as rent income).
Pay As You Earn (PAYE) is a mandatory tax levied on all employees’ income by the Kenya Revenue Authority (KRA). All employers, by law, must deduct PAYE from an employee’s salaries and wages at the prevailing rates. This is to be remitted in the same amount to KRA on or before the ninth day of the following month.
PAYE in Kenya applies to bonuses, salaries, commissions, wages, directors’ fees or any other income from work.
The Kenyan government has proposed a 100% tax relief for individuals earning a gross monthly income of up to KES 24,000. The maximum rate of 30% will be applied to income in excess of KES 388,000.
PAYE returns are submitted online via iTax. A NIL return is required if there is no PAYE to submit.
|Monthly Taxable Pay (KES)||Annual Taxable Pay (KES)||Tax Rate (%)|
|Up to 24,000||Up to 288,000||10.0|
|24,001 – 32,333||288,001 – 388,000||25.0|
|Above 32,333||Above 388,000||30.0|
The National Social Security Fund (NSSF) is the largest social security scheme covering almost all of Kenya’s formal labor force. NSSF is a state-administered provident fund though the government ensures every worker in Kenya is provided with minimum social security protection. All employers must register with the fund and remit statutory contributions monthly.
Other schemes include the Retirement Benefits scheme, the Retirement Benefits (Amendment in 1998) scheme, the National Health Insurance Fund (NHIF), the Pensions scheme and the Pensions (Increase) scheme.
The employer and employee each contribute KES 200 per month to NSSF.
WIBA (Workman compensation under the Work Injury Benefits ACT) – Every employer is required to obtain and maintain an insurance policy with a ministry-approved insurer. An employee should be insured for WIBA immediately upon the start of a contract of employment.
The above rates serve as a broad guideline. Actual rates charged by GoGlobal will differ.
Salary should be paid to the employee or to an authorized person in Kenyan currency.
Employers must provide payment for work performed before or on the agreed pay day. The payment made is usually calculated hourly, daily, weekly and monthly. This calculation will depend on the type of contract signed.
An employer is required to provide an employee with an itemized payslip before payment of wages or salary. This must contain remuneration for work and amounts that have been deducted in terms of taxes, insurance, NSSF requirements or due to any damages.
Electronic payslips are acceptable.
An employee is entitled to a minimum of 21 days of paid leave per year following 12 consecutive months of service.
An employee is entitled to full paid sick leave once they have completed a period of two consecutive months’ service.
The Employment Act specifies the minimum period of entitlement as seven days with full pay and seven days with half-pay for every twelve month period. The employee is required to produce a certificate of incapacity to work signed by a duly qualified medical practitioner.
Maternity & Parental Leave
A female employee is entitled to three months’ maternity leave. This is to be offered with full pay. On expiration of a female employee’s maternity leave, the female employee retains the right to return to the job which she held immediately prior to her maternity leave or to a reasonably suitable job on terms. This must offer conditions not less favorable than those which would have been in effect had she not been on maternity leave.
The employee must give a minimum seven days’ notice in writing of her intention to proceed on maternity leave on a specific date and to return to work thereafter. The employee may be required to produce a certificate from a medical practitioner to prove delivery.
A female employee is entitled to full pay during maternity leave. Additionally the employee will not lose her annual leave entitlement.
A male employee whose official wife has delivered a baby is entitled to paternity leave with full pay. The employee will be entitled to fourteen calendar days’ paternity leave.
Prospective adoptive parents (employees) are entitled to pre-adoptive leave of one month with full pay.
Compassionate & Bereavement Leave
Compassionate leave allows an employee to attend to death, accidents or sickness concerning relatives and friends. The number of days taken will be deducted from the annual leave entitlement for the year.
Kenya has 11 public holidays. If any of these holidays fall on a Sunday, the next working day will be a holiday.
Benefits to the Employee in Kenya
A person is eligible for retirement pension on attaining the pensionable age (of 60 years) or attaining the age of 50 years in the case of opting for early retirement.
A survivors’ pension is paid to the dependents if a member dies before the pensionable age and was contributing to the Pension Fund at the time of his death. In order for this to apply, at least 36 monthly contributions must have been made by the member immediately before the date of death.
A member is entitled to invalidity pension if she or he suffers physical or mental disability of a permanent nature as certified by a medical board established under the Act and has made at least 36 monthly contributions immediately before the date of invalidity.
Visas and Foreign Workers
A foreign employee can only work in Kenya with a valid work permit or pass issued by the Department of Immigration.
There are several classes of work permits issued. These vary by the nature of the work foreign nationals are engaged in.
Class D is the most prevalent class for foreign workers. This permit is issued to foreign workers who have been offered employment by a specific employer, the government of Kenya, an organ of the United Nations or any other agency authorized by the Department of Immigration. To acquire this permit, foreign workers must show they possess skills or qualifications not available in Kenya.
Work permits are usually valid for two years with the option to renew for another two years.
These are the other classes of permits and the provisions for each class vary:
Class A: For prospecting for minerals or mining
Class B: Agriculture and animal husbandry (KEP/B)
Class C: Prescribed profession (KEP/C)
Class D: Employment (KEP/D)
Class F: Specific manufacturing(KEP/F)
Class G: Specific trade, business or consultancy (KEP/G)
Class I: Approved religious or charitable activities (KEP/I)
Class K: Ordinary residents(KEP/K)
Class M: Refugees (KEP/M)
Special Pass: This is intended for individuals who would like to conduct any business, trade or profession or who are looking to apply for another permit when in Kenya. This visa is valid for up to 90 days.
Public Holidays in 2022
|1.||New Year’s Day||January 1st|
|2.||Good Friday||April 15th|
|3.||Easter Monday||April 18th|
|4.||Labour Day||May 1st|
|5.||Madaraka Day||June 1st|
|6.||Eid al- Fitr (end of Ramadan, exact day varies)||May 3rd|
|7.||Moi Day||October 10th|
|8.||Mashujaa Day, formerly Kenyatta Day||October 20th|
|9.||Jamhuri Day||December 12th|
|10.||Christmas Day||December 25th|
|11.||Boxing Day||December 26th|