Kenya PEO & Employer of Record
WeHG provides an International PEO and global Employer of Record service in Kenya to companies willing to enter the Kenyan market or seeking to hire local/expat employees in the country.
A widespread approach requires establishing a subordinate in the country (Kenya). However, our services enable you to initiate the processes in Kenya within days thus saving time and money. WeHireGlobally would contract prospects based on your interest but you will have complete operational supervision of their work. So legally they would be our job-seekers, on our local payroll, 100% acquiescent but will work on your behalf.
Kenya fast facts
Population: 55 Million
Land area: 580,367 km²
Local currency: Kenyan shilling (KES)
GDP per capita:$ 5,274
GDP in currency:$ 250.854 billion
Kenya, a country in East Africa famed for its scenic landscapes and vast wildlife preserves. It is the 29th most populous country in the world. Its Indian Ocean coast provided historically important ports by which goods from Arabian and Asian traders have entered the continent for many centuries. Along that coast, which holds some of the finest beaches in Africa, are predominantly Muslim Swahili cities such as Mombasa, the oldest and first capital city. Kenya’s western provinces, marked by lakes and rivers, are forested, while a small portion of the north is desert and semi-desert. The country’s diverse wildlife and panoramic geography draw large numbers of European and North American visitors, and tourism is an important contributor to Kenya’s economy.
Hiring, Negotiating and Doing Business in Kenya
Necessity of written employment contract
Employment contracts are regulated under Employment Act 2007. A contract of employment is a treaty, that can either be oral or written, whether expressed or implied, to employ or to serve as a worker for a certain period of time. It includes a contract of internship and indentured internship but does not include a foreign contract of service. Employment with a duration of more than three months should have a written contract. This must be given to the employee within two months of the commencement of the employment.
Different forms of engagement: employment, contracting, work with private entrepreneur
A foreign company that wishes to get a work license for one of its employees must first set up its Kenyan subsidiary/branch/representative office. Afterward, this Kenyan entity may then apply for the work permit.
An applicant may make an application directly or indirectly. When making an indirect application, such an individual can choose an agent such as a law firm or consultancy. However, it is important to point out that direct applications take a longer time.
Foreign nationals wishing to be employed by a Kenyan entity are required to apply for a Kenyan work permit. The different classes will depend on the specific circumstances of the applicant. Generally, the success rate depends on whether skilled labor for the position is available locally i.e. employers are required to justify the employment of the foreign national instead of a local.
All work permits are generally valid for 2 years, with renewals permitted for an extra 2 years at a time. The number of renewals is unlimited. Renewals need to be done at least 3 months before its due date.
Kenya Employment Contract
Types of employment agreements
The two basic types of employment contracts are open-ended and fixed-term contracts. Most of the employment contracts are open-ended and the employee is hired for an indefinite duration. Employees are also employed for a specified period of time under fixed-term contracts. These contracts mention a definite end date and the employment relation no longer exists after that date.
The other two types of employment contracts are individual employment contracts and collective bargaining contracts. An individual employment contract is endorsed between an employer and employee and both parties can concede to any conditions, however subject to certain constraints like paying minimum wage, allowing workers to form unions, not hiring forced or child labor, etc.
Collective bargaining agreement is signed between an employer and a representative union at an enterprise or industrial sector. The agreement reached between employee representatives i.e. union officials and employer(s) is subject to a ratification vote by the employees.
Kenya working hours
General working hours in Kenya are 52 hours per week, but normal working hours usually consist of 45 hours of work per week. For example, this could be eight hours from Monday to Friday, and five hours on Saturday.
A person employed for night work may not work for more than 60 hours a week. Working hours can be modified by collective agreements.
If a worker exceeds the normal hours weekly, the extra hours are treated as overtime. Overtime shall be paid at the rates of one and one-half occupations on weekdays and at the rate of twice the basic hourly rate on Sundays and public holidays. Employers can schedule overtime for their employees. Some occupations might require an employee to work overtime such as nursing.
Vacation leave in Kenya
An employee is entitled to an annual leave of twenty-one working days during which the employee is to be paid in full, without working and it is exclusive of public holidays. This provision is made for workers who have worked for 12 consecutive months.
An employee can amass leave but it must be taken within 18 months. Not doing so will force the employee to forfeit the accumulated leave.
Kenya Maternity Leave
According to the Employment Act 2007, female workers are entitled to three months (91 calendar days) of fully paid maternity leave on the birth of a child.
A written notice of at least 7 days, prior to beginning a maternity leave must be given by the employee, on a specific date and must return to work after the completion of 3 months.
When on maternity leave, the mother will receive her salary in full.
The maternity leave can be extended with the consent of the employer or a worker may proceed to sick leave or any other kind of leave with the employer’s approval.
A female employee who takes maternity leave shall not incur any loss of rights.
An employer is not allowed to terminate a woman working as a result of her absence from work due to pregnancy.
Kenya Severance Laws
Termination of employment is regulated under the Employment Act. A worker may be dismissed after serving due notice or paying in lieu of notice. The length of the notice period depends on the kind of employment contract.
- The notice period is not provided for a worker that is hired on a daily basis; the contract may be terminated at the end of the working day without any prior notice.
- at least seven days notice for workers during the probationary period (or payment in lieu of notice)
- For workers who get paid periodically for durations shorter than one month (e.g. on a weekly or fortnightly basis), a notice of equivalent period (a week or 15 days) may be served prior to contract termination
If workers are paid on a monthly basis or longer intervals, a 28-day notice must be served before contract termination
The duration of the notice period may be stated in the employment contract by mutual consent of both the employer and worker, provided that the period exceeds what is provided by the Act. Notice should be written in a comprehensible language that can be understood by the worker, otherwise, someone has to explain it to the worker, orally, in a language that he/she can comprehend.
Severance pay, paid by the employer, in Kenya is synonymous with 15 days basic wages for each completed year of employment.
The employment Act also contains provisions pertaining to service pay. It is paid at each completed year of employment in the case of cessation by notice in specific conditions and its terms are fixed in the employment contract. A worker is not entitled to service pay if he/she is a member of the Registered Pension Fund (RPF), gratuity or service pay scheme established under a collective agreement, or any other scheme provided by an employer whose terms are more favorable.
In Kenya, 30% stands as the personal income tax rate. The National Social Security Fund (NSSF) is a statutory savings scheme aimed at providing for retirement. Both employers and employees contribute 5% (up to KSH 200) per month.
Non-residents are also subject to income tax. An individual earning more than KSH 1,000 per month must make a monthly payment to the National Hospital Insurance Fund (NHIF) and this entitles the individual to a deduction in certain hospital charges.
Kenya is a member of the International Social Security Association.
Monthly donations are also to be made to the authorities for social security payment by the 15th of the following month.
Health Insurance Benefits in Kenya
Section 34 of the Employment Act stipulates that an employer is obligated to provide medical treatment to his/her employees.
In accordance with the Employment Act, every worker is entitled to paid sick leave (sickness benefit) lasting up to 14 days per year, after the completion of 2 months of service with an employer. An employer may provide fully paid sick leave for the first 07 days after which half wages are paid for the remaining 07 days.
Additional Benefits in Kenya
Guaranteed benefits in Kenya are imposed by law and must get allocated to all employees. It is best to add these benefits to your Kenya benefits management plan first before including any supplemental benefits. Kenya celebrates 10 national holidays that employees should get time off for. Employees are also entitled to 1.75 days of paid annual leave that they accrue each month they work for the company. You can also provide 21 days over 12 months.
Employees also usually care about maternity and paternity leave, which is another statutory benefit. Female employees should get three months of paid maternity leave but a written notice must be given before going on the leave and a medical certificate has to be presented. Two weeks of paid paternity leave is granted to Fathers.
Instead of using a national minimum wage, Kenya’s compensation laws vary by position and city. For example, cleaners, gardeners, etc. in Nairobi, Mombasa, and Kisumu should make at least 115.50 KES an hour. Cooks, waiters, miners, stone cutters, logger line cutters, and others also in Nairobi, Mombasa, and Kisumu must make at least 125.80 KES an hour.
General market practice benefits/additional allowances
There are plenty of reasons to regard Kenya as an investment target, some of these reasons include:
- Economic potential: Kenya embodies a sensational economic environment of doing business across a wide range of sectors, including agriculture, manufacturing, transport, energy, communications, and more. Innovative, creative entrepreneurs will discover tons of opportunities to gain a foothold in the country.
- International gateway: Kenya is a gateway to continental Africa, and enjoys privileges from numerous international trade relationships. Beyond its membership of the EAC, Kenya is part of trade schemes within the Africa Growth and Opportunity Act, the WTO, and COMESA.
- Business reform: Kenya’s economic outline is trending in a progressive manner. The growth of the country’s financial sector is thriving – and in 2016 it was ranked 42 (out of 140 countries) for ‘Financial Maturity’, by the World Economic Forum. Over 44 international banks are registered in Kenya, and it has the most advanced stock market in the East and Central Africa provinces.
- Transport infrastructure: Kenya is operated by an extensive network of road, rail, sea, and air links, which connect domestically and internationally. Jomo Kenyatta International, and the port of Mombasa, are respectively the busiest air and seaports on the African continent.
- Market strength: Kenya is a growing consumer market and has the second-largest population in the EAC. The country’s middle class is expanding. A young, digitally-connected population (with an average age of 18) is driving a spirited consumer culture.
There are12 public holidays in Kenya in 2022:
- New Year’s Day – Sat, 1 Jan 2022
- Good Friday – Fri, 15 Apr 2022
- Easter Monday – Mon, 18 Apr 2022
- Labour Day – Mon, 2 May 2022
- Eid al-Fitr – Likely 2–3 May 2022*
- Madaraka Day – Wed, 1 Jun 2022
- Eid al-Adha – Likely 9–10 Jul 2022*
- Huduma Day – Mon, 10 Oct 2022
- Mashujaa Day – Thu, 20 Oct 2022
- Jamhuri Day – Mon, 12 Dec 2022
- Christmas Day – Mon, 25 Dec 2022
- Utamaduni Day – Mon, 26 Dec 2022
Why Choose WeHireGlobally
WeHG takes control of all the onboarding complexities, payroll, salary and privileges, tax filing, and termination of employment. Our Employer of Record solution entitles you to oversee your foreign crews efficiently while minimizing expense and threat.
General working hours are 52 per week, but normal working hours usually consist of 45 hours of work per week. For example, this could be eight hours from Monday to Friday , and five hours on Saturday.
- New Year’s Day (Jan 1)
- Good Friday
- Easter Monday
- Labour Day (May 1)
- Madaraka Day (Jun 1)
- Mashujaa Day (Oct 20)
- Independence/ Jahmuri Day (Dec 12)
- Christmas Day (Dec 25)
- Boxing Day (Dec 26)
The National Social Security Fund (NSSF) is a statutory savings scheme to provide for retirement. Both employers and employee’s contribute 5% (up to KSH 200) per month.
An individual earning more than KSH 1,000 per month must make a monthly contribution to the National Hospital Insurance Fund which entitles them to a reduction in certain hospital charges.
Kenya is a member of the International Social Security Association.
Monthly contributions should be made to the authorities for social security payment by the 15th of the following month.