Employment laws in Kenya

As an employer, understanding the employment laws in Kenya helps you navigate legal issues, foster a better workplace, and maintain a satisfied workforce. 

These laws establish clear guidelines for treating employees fairly, handling hiring and termination procedures, and maintaining a safe and healthy work environment. 

In this guide, we will explore the key policies that all business owners must typically follow, making it easier for you to manage the workforce with confidence. Moreover, for local compliance support, consider Payoneer Workforce Management, a platform that helps streamline hiring and payroll processes in Kenya. 

Key labor laws in Kenya

The laws governing employment in Kenya support fairness, safety, and dignity for workers. Here are the labor laws every worker and employer should know.

Contract employment laws

The contract employment laws in Kenya are outlined in the Employment Act of 2007. It helps define employees’ rights, duties, and what to expect clearly and fairly.

Types of contracts

A contract of service can be oral or written and can be for a specific period or task. It also covers apprenticeships and must outline the terms of engagement.

The types of contracts are:

• Definite contract: an employment contract with a fixed term. This is typically suitable for project-based work.
• Indefinite contract: This typically has no end date. Both the employer and employee can agree on flexible terms, making it the standard option for long-term employment.

Essential contract terms

Every job agreement under the employment laws in Kenya should be clear and fair. Under the Employment Act, 2007, of Kenya, Section 10 outlines the essential particulars that must be included in a written contract of service, especially for employment lasting three months or more.

• Personal information:
  • Full name of the employee, their age, sex, and permanent address.
  • Name of the employer.
• Employment details:
  • A clear outline of the employee’s role and responsibilities.
  • The date when the employment begins.
  • Whether the contract is for a fixed term or an indefinite period.
  • The location where the employee will perform their duties.
  • Working hours
• Compensation and benefits:
  • The scale or rate of pay, method of calculation, and any additional benefits.
  • Payment intervals (e.g., weekly, monthly).
  • The date when the employee’s period of continuous employment began, considering any previous employment that counts towards this period.
• Additional terms:
  • Details on annual leave, public holidays, and holiday pay.
  • Provisions related to incapacity to work due to sickness or injury, including sick pay.
  • Pension schemes.
  • The length of notice the employee is obliged to give and is entitled to receive to terminate the contract.
  • If the employment is not for an indefinite period, the expected duration or end date.
  • For employees required to work at various places, an indication of those places and the employer’s address.
  • For employees required to work outside Kenya for more than one month, provide details about the period, the currency of remuneration, any additional compensation, benefits, and the terms of return to Kenya.

Minimum wage in Kenya

The minimum wage in Kenya is 36,360.92 KES per month. 

The Employment Act outlines key areas related to wages and employee treatment. 

Employers are required to pay employees at least the basic minimum wage, which varies depending on the employee’s age, job type, and other relevant factors. They also must verify the employee’s age, either through their birth certificate or other supporting documents.

For support with managing an international workforce with ease and streamlining global payroll, you can integrate Payoneer Workforce Management into your business infrastructure.

Working hours in Kenya

In Kenya, the standard workweek is 45 hours per week (8 hours per day), spread over six days. The maximum working hours in Kenya are 52 hours per week. 

Employees are entitled to at least one rest day within every seven days. 

Mandatory benefits

In line with the employment laws in Kenya, certain mandatory benefits must be provided to employees.

• Pension: The pension fund covers states like invalidity, survivor’s pension, funeral grants, and immigration benefits.
• Social security: The Fund provides basic social security, expands coverage, and ensures sustainable, value-added pension benefits for all members.
• Sick leave: Employees are entitled to up to 14 days of sick leave per year, consisting of 7 days with full pay and 7 days with half pay, upon providing a medical certificate.
• Maternity leave: Employee contract laws in Kenya stipulate that female employees are entitled to three months of fully paid maternity leave.
• Workers’ compensation: Employees injured on the job are entitled to compensation, unless exceptions such as serious misconduct or false health disclosures apply. Exceptions apply in cases of serious misconduct, false health disclosures, refusal of medical aid, or long-term foreign assignments outside Kenya.
• Death benefits: Per employment laws in Kenya, a funeral grant is paid in a lump sum to the next of kin if the deceased had contributed for a few months before their death. The claim must be made within the threshold period, and the next of kin may include a spouse, parent, sibling, or the person covering the funeral costs.
• Disability: Permanently disabled members may qualify for an invalidity pension, subject to medical board reviews.

Termination

When an employer ends a contract with an employee in Kenya, there are specific rules to follow. As per the employment laws in Kenya, they are:

• Notice Period: 
  • During probation, the notice period is 7 days
  • After probation, the notice period is typically 28 to 30 days.
• Understanding the Notice: If an employee doesn’t understand the termination notice, the employer must explain it in a language the employee understands.
• Severance Pay: Employees with open-ended contracts are entitled to severance pay of 15 days’ salary for each year of service.
• Exceptions for Certain Employees: If an employee is part of a pension plan or another special scheme, they might not be covered by the usual rules for service pay.
• Immediate Termination Without Notice: Employers can terminate an employee’s contract immediately (without notice) if the employee has seriously violated work rules, such as being absent without permission or being intoxicated while at work.
• Redundancy: If an employee is laid off due to redundancy (job cuts), the employer must follow certain rules, like giving a month’s notice and paying severance (a certain amount for each year worked).
• Summary Dismissal: If an employee’s behavior is very bad (like theft or serious misconduct), the employer can fire them without notice.

Other employee rights and protections

Beyond wages, labor laws in Kenya offer more employee rights and protections. Read on to know what else you’re entitled to.

• Equality: Employers must ensure equal treatment and eliminate discrimination in all employment practices.
• No forced labor: Forced labor is strictly prohibited under all circumstances.
• Sexual harassment: Employers must prevent and address workplace sexual harassment by implementing clear policies and providing legal recourse.
• Dispute resolution: Employees can report disputes through labor officers or courts for fair redress.

Navigate employment laws in Kenya with trusted support

Kenya is a rising economic force, known for its skilled workforce and booming tech scene. But with opportunity comes the need to comply with detailed employment laws in Kenya. 

From employment contracts to compensation, even minor missteps can lead to legal and financial setbacks. 

Payoneer Workforce Management can help you stay compliant by supporting hiring, onboarding, payroll, and local regulations. With expert support, you can focus on growing your business. Build confidently in Kenya, backed by local insight and a partner who understands the law.

Book a demo today!

FAQs

1) How are overtime payments calculated under Kenyan law?

Overtime is calculated based on an employee’s hourly wage, which is 1.5 times the regular hourly rate for work beyond 52 hours a week, depending on the employment contract. During Sundays and public holidays, the overtime rate is 2x the regular salary.

2) What is the minimum age for employment in Kenya?

In Kenya, the minimum age for employment is 13 years old, particularly for light work. However, for hazardous work, the minimum age is 18, and employees over 16 years old can be considered full-time workers.

3) Are employers in Kenya required to provide a certificate of service?

Yes, typically, employers must provide a certificate of service to an employee upon termination. This certificate should include the employee’s job details, duration of employment, and other relevant information about their role. This helps streamline the employee offboarding process.