Kenya

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 hire local/expat employees in this country.

Wide-spread approach requires establishing a subsidiary in Kenya.  However, our simplification offers you to start the operations in Kenya within days hence save time and money.  WeHG would hire candidates on your behalf when you keep complete operational control of their work. So legally they would be our job-seekers, on our local payroll, 100% compliant but will work on your behalf.

Kenya fast facts

Population, million: 47
Land area: 580,367 km²
Capital: Nairobi
Local currency: Kenyan shilling (KES)

GDP per capita:$ 4,071
GDP in currency:$ 206.532 billion

Kenya, country in East Africa famed for its scenic landscapes and vast wildlife preserves. 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, a historic centre that has contributed much to the musical and culinary heritage of the country. Inland are populous highlands famed for both their tea plantations, an economic staple during the British colonial era, and their variety of animal species, including lions, elephants, cheetahs, rhinoceroses, and hippopotamuses. Kenya’s western provinces, marked by lakes and rivers, are forested, while a small portion of the north is desert and semidesert. 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 an agreement, whether oral or written, and whether expressed or implied, to employ or to serve as a worker for a certain period of time. It includes a contract of apprenticeship and indentured learnership but does not include a foreign contract of service.

Different forms of engagement: employment, contracting, work with private entrepreneur

A foreign company that wishes to get a work permit for one of its employees must first set up its Kenyan subsidiary/branch/representative office. This Kenyan entity may then apply for the work permit.

An applicant may make an application directly or choose an agent such as a law firm or consultancy. However, do note 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 labour for the position is available locally i.e. employers are required to justify 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 prior to expiry.

Kenya Employment Contract

Types of employment agreements

The two basic types of employment contract are open-ended and fixed term contracts. Most of the employment contracts are open ended and employee is hired for an indefinite period of time. Employees are also hired for a definite time period under the 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 signed between an employer and employee and both parties can agree to any conditions, however subject to certain restrictions 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 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.

A person employed for night work may not work for more than 60 hours a week.

Overtime

If a worker works more than the normal hours weekly, the extra hours are treated as overtime. Overtime shall be paid at the rates of one and one half hourly rate on weekdays and at the rate of twice the basic hourly rate on Sundays and public holidays. The employers can schedule overtime for their employees.

Vacation leave in Kenya

Annual leave is the twenty-one working days during which the employee is entitled to full pay, without working and it is exclusive of public holidays.

When the employee has worked with the employer for 12 consecutive months, they are entitled to annual leave.

An employee can accumulate leave but they 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.

The worker must give a written notice of at least 7 days prior to proceeding on maternity leave on a specific date and return to work after the completion of 3 months.

When on maternity leave, the female employee 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 privileges.

An employer is not allowed to dismiss a woman worker because of absence from work due to pregnancy.

Kenya Severance Laws

Termination of employment is regulated under the Employment Act. A worker may be terminated after serving due notice or paying in lieu of notice. Length of notice period depends on the type of employment contract.

  • Notice period is not provided for a worker hired on daily basis; contract may be terminated at the end of working day without any prior notice
  • at least seven days notice for workers during the probationary period (or payment in lieu of notice)
  • Workers who get paid periodically for intervals shorter than one month (e.g. on 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 interval, a 28-day notice must be served before contract termination

Length of notice period may be set in employment contract by mutual consent of employer and worker, provided that the period is more than that is provided by the Act. Notice should be written in language easily comprehended by the worker, otherwise someone has to explain it to the worker, orally, in language that he/she could comprehend.

Severance pay, paid by the employer, in Kenya is equivalent to 15 days basic wages for each completed year of employment.

Employment Act also contains provisions relating to service pay. It is payable for each completed year of employment, in the case of termination by notice in certain circumstances and its terms are fixed in employment contract. A worker is not entitled to service pay if he/she is a member of Registered Pension Fund, gratuity or service pay scheme established under collective agreement, any other scheme provided by employer whose terms are more favorable.

Kenya Tax

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.

Health Insurance Benefits in Kenya

In accordance with the Employment Act every worker is entitled to paid sick leave (sickness benefit) for up to 14 days per year, after completion of 2 months of service with an employer. Employer may provide fully paid sick leave for the first 07 days, and half wages are paid for the remaining 07 days.

Additional Benefits in Kenya

Guaranteed benefits in Kenya are required by law and must get dispersed to all employees. It’s 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 your 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 need to give seven days of written notice before going on the leave and present a medical certificate. Fathers get two weeks of paid paternity leave.

Instead of using a national minimum wage, Kenya’s compensation laws vary by position and city. For example, cleaners, gardeners, general workers, sweepers, and similar workers 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, including:

  • Economic potential: Kenya represents an exciting economic environment in which to do business across a wide range of sectors, including agriculture, manufacturing, transport, energy, communications and more. Innovative, creative entrepreneurs will find plenty of opportunities to gain a foothold in the country.
  • International gateway: Kenya is a gateway to continental Africa, and benefits 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, COMESA, and SADC (soon to be a Free Trade Area).
  • Business reform: Kenya’s economic profile is trending upwards. The development of the country’s financial sector is growing – 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 developed stock market in the East and Central Africa region.
  • Transport infrastructure: Kenya is served 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 sea ports 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, while income per capital has grown at a rate of 2% over the past 10 years. A young, digitally-connected population (with an average age of 18) is driving a buoyant consumer culture.

Kenya Holidays

There’re 9 public holidays in Kenya:

  • 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)

Why Choose WeHireGlobally

WeHG takes care of all the onboarding hurdles, payroll, compensation and benefits, tax filing, and termination of employment. Our Employer of Record solution allows you to manage your overseas teams efficiently while minimizing cost and risk.

FAQ Kenya

  • Working hours in Kenya

    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.

  • What are the main holidays in Kenya?

    • 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)
  • What are payroll taxes in Kenya?

    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.

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