Doing Business in Kenya - RSM International

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5.3.2 WagesAlthough the Employment Act does not make any specific provisions for wages, allwages are subject to the minimum wage provided for in the Regulations of Wagesand Conditions of the Employment Act and the minimum wage guidelines issued andrevised yearly by the Ministry of Labour. These guidelines outline the occupationsand the rate of payment on monthly/daily/hourly basis.In practice, there are two major classes of employees - the management cadre (whoprimarily are not unionised by choice) and the junior staff who are unionised. Thewages paid to non-unionised staff is negotiated between the employer and theemployee and is contained in the employment contract. For employees that optto join relevant trade unions, wages are normally negotiated by their union andcontained in the respective Collective Bargaining Agreement (CBA).5.3.3 Working HoursThe normal working week is outlined by the specific wage regulations order for thegiven industry but is not more than 52 hours spread over 6 days of the week.5.3.4 OvertimeFor the management staff, it is usual practice for the wages negotiated to contain theaspect of overtime and as such it is not paid as a separate entitlement.However, for the junior staff, overtime is paid at the rates of one and one-half timethe basic hourly rate on weekdays, and at the rate of twice the basic hourly rateon Sundays and public holidays. There are different Regulations of Wages Orders inforce, covering different sectors of the economy.5.3.5 LeaveAnnual LeaveUnder the Employment Act, every employee shall be entitled to no less than 21working days of annual leave with full pay. Where the employee works for less thana year, the number of days will be reduced accordingly. This is a minimum and manycontracts and collective agreements provide for annual leave of between 30 to 45days. On average, Kenyan employees enjoy annual leave of 24 days.Sick LeaveUnder the Employment Act, an employee is entitled to paid sick leave after a periodof 2 consecutive months of service. The minimum period of entitlement is 7 dayswith full pay and 7 days with half-pay for every 12 months. The longest period ofentitlement is 30 days with full pay and 15 days with half-pay. The employee ishowever expected to produce a certificate of incapacity to work signed by a dulyqualified medical practitioner.66DOING BUSINESS IN KENYA
Maternity LeaveUnder Section 7 (2) of the Employment Act, maternity leave is 2 months with full pay,provided that a woman who has taken 2 months maternity leave does not forfeit herannual leave in that year.5.3.6 Public HolidaysThe list below outlines public holidays. Where any of these holidays fall on a Sunday,the next working day will be a holiday.• 1st January - New Years Day• 1st May - Labour Day• 1st June - Madaraka (Independence) Day• 20th October - Mashujaa Day• 12th December - Jamhuri (Republic) Day• 25th December - Christmas Day• 26th December - Boxing DayUndated Public Holidays• Good Friday and Easter Monday• Idd-ul-fitr5.4 Statutory DeductionsNational Social Security FundNational Social Security Fund (NSSF) is the statutory retirement benefits schemeand operates as a public trust. It provides retirement benefits for employees inthe formal and informal sectors. The trustees of NSSF register members, receivecontributions, manage funds of the scheme, process and ultimately pay out benefitsto eligible members or dependants.There is compulsory registration for all employers irrespective of the number ofemployees. The details required for registration include a copy of the Certificate ofIncorporation / Registration, PIN, physical location and employee details. In addition,each employee subject to deductions is also required to register individually.The employer is required to remit to the fund 10% of the monthly income up to amaximum of Shs 400; half of which is paid by the employer and half by the employee.Volunteer registration is permitted for casual and self-employed workers. For casualworkers, a special contribution of 5% of gross wages is payable by the employer.Deductions have to be remitted by 15th of the following month or last working daybefore the 15th where this falls on a Saturday, Sunday or a public holiday.DOING BUSINESS IN KENYA67
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2.0 General2.1 IntroductionKenya li
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Page 26 and 27: territory or domestic market. Motor
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Page 30 and 31: 4.2.6 Business with Non-Resident Pe
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Page 44 and 45: The VAT rates applicable in Kenya a
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Page 54 and 55: However, where a motor vehicle or o
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Page 58 and 59: granted or is partly granted, the b
Page 60 and 61: • Airtime on cellular mobile phon
Page 62 and 63: Transit VisasThese are visas requir
Page 64 and 65: Class K is for persons who have an
Page 68 and 69: NSSF provides the employee with a l
Page 70 and 71: 6.0 ACCOUNTING6.1 Statutory Framewo
Page 72 and 73: 7.0 INTELLECTUAL PROPERTYRIGHTSKeny
Page 74 and 75: Years 1 Shs 1,000Year 2 Shs 1,500Ye
Page 76 and 77: 8.0 Listing Rules8.1 The Capital Ma
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Page 80 and 81: 8.3 Payable FeesCompanies pay an in
Page 82 and 83: 9.0 Investing in Kenya9.1 General I
Page 84 and 85: 9.3 Foreign Ownership of Shares and
Page 86 and 87: Contact Details - RSM AshvirRSM Ash
Page 88 and 89: Appendix of Acronyms used in the Bo
Page 90: Notes90DOING BUSINESS IN KENYA
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Doing Business in Kenya - RSM International

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