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Kenyan Currency

Kenyan Shilling (KES)

The Capital of Kenya

Nairobi

Time Zone in Kenya

GMT+3

Important Facts About the Country of Kenya

Introduction to Kenya

Kenya, formally known as the Republic of Kenya, is situated in Eastern Africa. The nation declared its independence in 1963 and adopted its Constitution. Presently, Kenya operates as a presidential representative democratic republic with a multi-party system. Its coastline along the Indian Ocean has served as vital ports through which goods from Arabian and Asian merchants have accessed the continent for centuries.

What to Know about Kenya’s Geography

Kenya spans a total area of 580,367 square kilometers and shares borders with several countries: Ethiopia to the north, South Sudan to the northwest, Somalia to the east, Uganda to the west, and Tanzania to the south. Additionally, Kenya is flanked by the Indian Ocean to the southeast.

Climate in Kenya

Kenya experiences a diverse range of climates, ranging from cold, snow-capped mountain peaks to temperate conditions in western and Rift Valley counties, and from dry arid regions to outright deserts. The country typically observes two rainy seasons: the “long rains” from March or April to May or June, and the “short rains” from October to November or December.

The Culture of Kenya

Since gaining independence, Kenya’s government has emphasized the motto of ‘Harambee’ (Swahili for “pulling together”), underscoring unity despite the country’s diverse cultural landscape. Kenya is home to various traditions, including the Swahili population along the coast, numerous Bantu communities in the central and western regions, and Nilotic communities in the northwest.

Religions Observed in Kenya

Kenya’s constitution guarantees freedom of religion. The majority of Kenyans adhere to Christianity (85.5%), with 53.9% identifying as Protestant and 20.6% as Roman Catholic. Islam is the second-largest religion, embraced by 10.9% of the population. A small percentage of Kenyans (0.7%) practice indigenous beliefs, while 0.13% are Hindus. Additionally, 0.7% of the population identifies as non-religious.

Languages Spoken in Kenya

English and Swahili are the official languages of Kenya, with English commonly used in business, education, and government. In their respective communities, Kenya’s diverse ethnic groups often communicate in their mother tongues.

Kenyan Human Resources at a Glance

Employment Law Protections in Kenya

Kenya’s employment and labor relations laws have undergone significant evolution in the past decade, coinciding with the enactment of the Constitution in 2010. These legal reforms have brought about substantial changes, strengthening the rights of employees across various aspects of labor law.

Employment relationships in Kenya are governed by a multifaceted framework, drawing from constitutional provisions, individual employment contracts, and statutory regulations, as well as collective bargaining agreements (CBAs).

The legislative foundation guiding employment and labor relations in Kenya revolves around five primary statutes:

1. Employment Act
2. Labor Relations Act
3. Labor Institutions Act
4. Work Injury Benefits Act
5. Occupational Health and Safety Act

Employment Contracts in Kenya

An employment agreement lacking a specified duration is deemed indefinite and can be terminated with notice by either party. However, in the organized sector, collective agreements providing workers with tenure restrict employers’ ability to terminate contracts.

Other contract types include:

1. Casual employment
2. Piecework employment
3. Apprenticeship contracts

In Kenya, both oral and written contracts hold legal validity. However, contracts exceeding three months’ duration must be documented. If written, certain essential elements must be included, such as:

– Employee’s name and age
– Employee’s permanent address
– Employer’s name
– Job description
– Start date of employment
– Contract duration
– Workplace location and working hours
– Remuneration details and payment frequency
– Leave entitlement

These critical details must be mutually agreed upon within two months of the employment commencement.

Kenya's Contract Terms

An “employee” in Kenya is defined as an individual engaged for compensation, encompassing apprentices and indentured learners. A “contract of service” denotes a binding agreement, whether verbal or written, explicit or implicit, to employ or serve as a worker for a specified duration. This category encompasses apprenticeship and indentured learnership agreements.

Certain contracts of service are legally mandated to be documented. These include contracts:

– Spanning a continuous six-month period
– Comprising non-continuous periods totaling six months
– Involving tasks lasting for six months

If a contract is written, it must bear the employee’s signature or fingerprint, signifying their agreement to its terms. Additionally, an independent witness (not the employer) is required. It is the employer’s responsibility to ensure compliance with the law regarding written contracts.

Flexible work arrangements can be established between employers and employees, allowing for adaptable schedules. With the advent of the COVID-19 pandemic, many workplaces have embraced flexible and agile work arrangements.

Pre-Employment Checks

Employers have the prerogative to conduct background checks for the following:

Criminal records – Verification of good conduct can be sought from the Directorate of Criminal Investigations.
Medical history – Prospective employees may be required to undergo medical examinations, contingent upon their consent.
Drug screening – Relevant for positions where drug-related concerns are pertinent.
Immigration status

Kenya's Guidelines Regarding Probation Period/Trial Period

The probationary period should not exceed six months and can be extended for an additional period of up to six months with mutual consent.

During the probationary period, either party can terminate the contract by providing a minimum of seven days’ notice. Alternatively, seven days’ wages may be offered in lieu of notice.

Regulations and Rules Regarding Working Hours in Kenya

The statutory limit for maximum working hours is 52 hours per week, with one mandatory rest day within every seven-day working period. However, it is customary for working hours to be 45 hours per week, distributed across five days.

Kenyan Laws Regarding Overtime

Overtime is compensated at a minimum rate of 150% of the regular hourly wage for overtime worked on normal working days. On gazetted public holidays, the rate increases to 200% of the hourly wage.

Typically, management employees do not qualify for overtime pay as specified in their contracts.

Kenyan Timesheets

Employment records must be retained for at least five years after the conclusion of employment.

Rules Regarding Bonus and 13th Month Pay in Kenya

In Kenya, bonuses and the 13th-month salary are not obligatory. Their inclusion in contracts or collective bargaining agreements (CBAs) is subject to negotiation between the employer and the employee.

Termination

The termination of employment must be justified by valid and fair reasons, commonly referred to as “just cause.” This may include factors such as an employee’s conduct, capability, compatibility, or the operational needs of the employer. Prior to termination, employees have the right to a fair hearing, especially in cases related to misconduct, underperformance, or incapacity.

Various procedures are followed depending on the grounds and method of termination.

While paternity leave is offered to government employees, it is not mandated in the private sector, and its provision is at the discretion of the employer.

The required process for terminating employment due to poor performance, misconduct, or incapacity involves the following steps:

1. The employer must clearly state the reasons for considering termination of the employment.
2. The employee must be given a chance to present their perspective before the termination is finalized. During this hearing, the employee has the right to be accompanied by a fellow employee or a representative from their union.

When terminating employment due to poor performance, it’s essential for the employer to have a structured performance review system in place. This system should provide employees with opportunities to enhance their performance over a fair timeframe before termination is considered. Typically, a period of two to three months is deemed appropriate for placing an underperforming employee on a Performance Improvement Plan (PIP).

When considering termination due to illness or incapacity, there are two primary considerations:

1. Employers are obligated to explore options for accommodating a sick or incapacitated employee before resorting to termination on medical grounds. This may involve offering alternative work assignments, such as light duties, or making adjustments to the working environment to facilitate the employee’s continued employment.

2. Employers must approach the process of termination for incapacity or sickness with care and sensitivity, ensuring that the employee’s circumstances are handled respectfully and with due consideration for their well-being.

For redundancies, two notices must be issued:

1. The employer must first provide notice of intended termination to affected employees or their union, where applicable, at least one month before the planned redundancy date. Consultations should occur during this period.

2. Additionally, the employer must notify the labor officer at least one month in advance of the intended redundancy date.

Payment in lieu of notice is provided upon the completion of the 30-day notice period. Alternatively, employees can serve notice during this time instead of receiving payment in lieu.

Mutual separation or termination agreements are permitted in Kenya, governed by common law principles of contract validity and enforceability. These agreements typically involve employees waiving any claims against the employer in exchange for a separation package.

While there’s no specific legal protection against dismissal for certain employee categories (e.g., pregnant employees, those on maternity leave, or due to illness), employers risk facing discrimination accusations, which are prohibited by law and the Constitution. Therefore, caution should be exercised in such cases.

Kenya's Requirements Regarding Notice Periods

Notice periods are contingent upon the wage payment frequency:

1. Daily Payment: Contracts may be terminated at the end of the day without prior notice to either party.
2. Weekly or Bi-weekly Payment: Contracts can be terminated with one week’s written notice.
3. Monthly or Longer Intervals: Termination requires 28 days’ written notice.

The law ensures fairness. If an employee resigns without notice, they are obligated to compensate the employer for the notice period they should have served.

Redundancy/Severance Pay in Kenya

Severance pay in Kenya amounts to 15 days of basic wages for each completed year of employment.

Gratuity or service pay refers to the sum paid to an employee by an employer upon termination of their contract of service, whether it’s a contractual provision or a statutory obligation. According to the Employment Act in Kenya, this benefit is extended to employees not covered by a pension fund or N.S.S.F.

Final pay varies depending on the termination method. An employee terminated with payment in lieu of notice receives that compensation in addition to their earned salary up to the termination date. They are also entitled to payment for any accrued but untaken leave.

In cases of summary dismissal, the employee receives their earned salary up to the dismissal date along with compensation for accrued, unused leave.

Post-Termination Restraints/ Restrictive Covenants

In Kenya, restrictive covenants are generally unenforceable unless deemed reasonable. However, labor courts often hesitate to uphold such clauses due to various factors.

One primary reason is the unequal bargaining power between employers and employees. Additionally, employees may need to secure employment to sustain themselves, which conflicts with restrictive clauses.

Fixed Term Contacts for Kenyan Employees

When an employment contract designates a fixed term, the employment arrangement naturally concludes at the end of this duration, neither constituting a resignation nor a dismissal. Renewal of fixed-term contracts is unrestricted.

Employees under fixed-term contracts retain all employee rights akin to those in permanent positions, barring explicitly excluded entitlements like pensions, or those impractical for short-term roles, such as annual leave.

Tax and Social Security Information for Employers in Kenya

Personal Income Tax in Kenya

Individual income tax encompasses earnings worldwide, including non-employment income like rental income.

Pay As You Earn (PAYE) is obligatory, imposed on all employee income by the Kenya Revenue Authority (KRA). Employers are legally bound to deduct PAYE from employees’ salaries and remit it to the KRA at prevailing rates by the ninth day of the following month.

PAYE in Kenya applies to various forms of income, including bonuses, salaries, commissions, and director’s fees.

The government of Kenya has proposed a 100% tax relief for individuals earning a gross monthly income of up to KES 24,000. For income exceeding KES 388,000, a maximum rate of 30% applies.

PAYE returns are submitted online through iTax. A NIL return is mandated if no PAYE is due.

Annual Taxable Pay (KES)	Tax Rate (%)
On the first 288,000	10.0
On the next 100,000	25.0
On the next 5,612,000	30.0
On the next 3,600,000	32.5
On all income over 9,600,000	35.0

Social Security in Kenya

The National Social Security Fund (NSSF)

The National Social Security Fund (NSSF) is a pivotal social security scheme catering to the formal labor force, encompassing the majority of employees. Functioning as a state-managed provident fund, it ensures basic social security coverage for workers. Employers are mandated to enroll with the fund and make monthly contributions as per statutory requirements.

Both the employer and employee contribute 6% of the employee’s monthly earnings to NSSF, with a maximum limit of KES 18,000 per month.

Affordable Housing Levy

The Affordable Housing Levy is dedicated to the development of affordable housing projects and related infrastructure, along with facilitating accessible financing options for homebuyers.

Employers and employees each contribute 1.5% of the employee’s monthly salary to this fund.

Employers must remit the levy before the 9th of the subsequent month. Delays incur a penalty of 2% per month on outstanding amounts.

National Industrial Training Levy (NITA)

Employers are obliged to pay a monthly levy of KES 50 per employee to the Directorate of Industrial Training. Employee contributions are not required.

National Hospital Insurance Fund (NHIF)

Employees contribute NHIF premiums based on graduated bands, up to a maximum of KES 1,700 per month, reaching the peak at a salary level of KES 100,000 per month. There is no employer contribution, but employers are responsible for deducting and remitting NHIF contributions monthly.

Work Injury Benefits Act (WIBA)

Employers are liable to pay a 1.5% work injury compensation.

The aforementioned rates serve as general benchmarks, subject to variations in actual charges.

Important Information for Kenyan Employees

Salary Payment

Payment of salary must be made in Kenyan currency directly to the employee or to an authorized representative.

Employers are obligated to ensure that employees receive their wages on or before the agreed-upon payday for the work performed. The payment structure typically involves hourly, daily, weekly, or monthly calculations, depending on the terms outlined in the employment contract.

Payslip

Before disbursing wages or salary, an employer must furnish the employee with a detailed payslip itemizing the remuneration for work done and any deductions made, including taxes, insurance, NSSF contributions, or deductions for damages. Electronic payslips are also permitted.

Annual Leave

After completing 12 consecutive months of service, an employee is entitled to a minimum of 21 days of paid leave per year.

Sick Leave

Once an employee completes two consecutive months of service, they are entitled to full paid sick leave. As per the Employment Act, this entitlement includes seven days of full pay and seven days of half-pay for every twelve-month period. To avail of this leave, the employee must furnish a certificate of incapacity to work signed by a qualified medical practitioner.

Maternity & Parental Leave

Maternity Leave:

Female employees are entitled to a three-month maternity leave with full pay. Upon completion of maternity leave, the employee has the right to return to her previous position or a suitable alternative with conditions not less favorable than before her leave.

To initiate maternity leave, the employee must provide at least seven days’ written notice of her intended leave start date and return date. A medical certificate confirming childbirth may also be required.

During maternity leave, the employee receives full pay and retains her annual leave entitlement.

Paternity Leave:

Male employees whose spouses have given birth are entitled to fourteen days of paternity leave with full pay.

Adoption Leave:

Prospective adoptive parents (employees) are entitled to one month of pre-adoptive leave with full pay.

Compassionate & Bereavement Leave

Compassionate leave permits employees to address matters related to the death, accidents, or illness of relatives and friends. The duration of compassionate leave taken will be subtracted from the employee’s annual leave allocation for the year.

Public Holidays

Kenya observes 11 public holidays. In the event that any of these holidays occur on a Sunday, the following working day will be considered a holiday.

Benefits to the Employee in Kenya

Kenyan Statutory Benefits

Pension

Retirement Pension Eligibility:

Individuals become eligible for retirement pension upon reaching the pensionable age of 60 years. Alternatively, they may opt for early retirement at the age of 50 years.

Dependents’/Survivors’ Benefit:

If a member of the pension fund passes away before reaching the pensionable age, and had been contributing to the fund at the time of death, a survivors’ pension is provided to their dependents. To qualify for this benefit, the deceased member must have made a minimum of 36 monthly contributions immediately preceding the date of death.

Invalidity Benefit:

Members are entitled to an invalidity pension if they experience a physical or mental disability of a permanent nature, as certified by a medical board established under the Act. To be eligible for this benefit, the member must have made at least 36 monthly contributions immediately prior to the onset of the disability.

Rules Regarding Visas and Foreign Workers in Kenya

General Information

Foreign nationals intending to work in Kenya must possess a valid work permit or pass issued by the Department of Immigration.

Work permits are categorized into different classes, each tailored to the specific nature of the work engaged in by foreign nationals.

Class D is the most common type of work permit, issued to foreign employees offered employment by a specific employer, the Kenyan government, a United Nations organ, or other authorized agencies. Applicants for this permit must demonstrate possessing skills or qualifications not readily available in Kenya.

Typically, work permits are initially valid for two years, with the possibility of renewal for an additional two years.

Other classes of permits include:

– Class A: For mineral prospecting or mining
– Class B: Agriculture and animal husbandry (KEP/B)
– Class C: Specific professions (KEP/C)
– Class F: Manufacturing activities (KEP/F)
– Class G: Trade, business, or consultancy (KEP/G)
– Class I: Religious or charitable activities (KEP/I)
– Class K: For ordinary residents (KEP/K)
– Class M: For refugees (KEP/M)

Additionally, there’s a Special Pass available for individuals conducting temporary business, trade, or professional activities in Kenya, valid for up to 90 days.

Public Holidays Recognized by Kenya in 2024

	Occasion	Date
1	New Year’s Day	January 1
2	Good Friday	March 29
3	Easter Monday	April 1
4	Eid al-Fitr*	April 9
5	Labour Day	May 1
6	Madaraka Day	June 1
7	Eid al-Adha*	June 17
8	Huduma Day	October 10
9	Mashujaa Day	October 20
10	Mashujaa Day Holiday	October 21
11	Jamhuri Day	December 12
12	Christmas Day	December 25
13	Utamaduni	December 26

* Religious holidays are confirmed closer to the date as they rely on the sighting of the moon.

Note: If a holiday falls on a Sunday, it will be observed on the following Monday.

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