Hire Employees in Kenya

Labor Laws in Kenya

Kenya boasts a dynamic workforce governed by a robust set of labor laws. These regulations are intended to safeguard the rights of employees, ensure fair and just working conditions, and promote overall economic stability.

Let’s look at some crucial labor laws to understand how to hire in Kenya seamlessly.

Minimum Wages

• The minimum wage in Kenya may vary depending on the cities or municipalities in Kenya. 
• In Nairobi, Mombasa, and Kisumu, the monthly minimum wage is estimated at 15,120 KES. Similarly, in the municipalities and town councils of Mavoko, Riuru, and Limuru, it is 14,025.40 KES. For all other areas (neither cities nor municipalities nor town councils), it is 8,109.90 KES.

Working Hours

• The standard working hours in Kenya are 40 hours per week.

Overtime Pay

Probation

• The probation period in Kenya is 3-6 months.

Notice Period 

• In Kenya, the statutory notice during probation is seven days.

• The Employment Act dictates that the statutory notice after probation is 30 days’ notice.
  

Payroll and Taxes in Kenya

Navigating the intricacies of payroll in Kenya is a crucial aspect of business operations. Some of the key elements include

Payroll Cycle

• The payroll frequency in Kenya is monthly. Employees are usually paid their compensation on the last day of the month.

VAT

• The standard VAT currently is 16%.

Pay As You Earn

• Pay As You Earn, commonly referred to as PAYE, is the system through which employers deduct income tax from employee’s salaries. 

13th Month Pay

• Although every employer doesn't need to provide a 13th-month pay bonus to their employees, this tradition is quite common, especially in the private sector. 
• The amount gets credited to the employee’s account in December, before Christmas.

Employee Benefits in Kenya

To attract and hire employees in Kenya, employers offer appealing employee benefits. Some of the statutory benefits in Kenya are as follows:

Annual Leave

• Every employee in Kenya is entitled to 21 days of paid annual leave.
• Unused, unpaid leave must be paid within one year.

Sick Leave

• Employees get seven sick leaves at 100% of their regular salary. After that, employees get 50% of the typical salary rate per year. 
• To be eligible, employees must have completed two consecutive months of service and have a professional medical certificate. 

Maternity Leave

• Female employees are eligible for three months of fully paid maternity leave in Kenya. 
• After the end of maternity leave, employees can rejoin the position or a similar position as per the contract signed. 
• To avail of the same, they need to produce a seven-day notice, citing the date they wish to proceed with the maternity leave and to return to work thereafter. 
• They may be required to produce a certificate authorized by any medical professional as proof of delivery.
• In the case of adoption, the same rule applies. However, employees must provide 14 days of notice to the employer before taking the leave. 

Paternity Leave

• Paternity leave in Kenya consists of 14 days.
• Adoptive fathers can also take paternity leave. However, they must give 14 days' notice before applying for paternity leave. 

Carry Forward of Leaves

• Employees can carry forward their unused leaves for a maximum of ten days.
• On agreement between employee and employer, a different number can be decided if it is not less than ten days. 

Other Types of Leave

• Study Leave, Compassionate leave, leave of absence, sabbatical leave and special leave are other types of leave organizations provide. However, these are not included in Kenyan labor laws.

Public Holidays

Cost of Hiring an Employee in Kenya

Calculating the cost of hiring in Kenya involves various components such as initial cost, flexibility, employment liabilities, and other additional benefits the employer provides. All employers must comply with all relevant labor laws and regulations to ensure accurate and lawful calculations. Here is a breakdown of the key elements to consider.

Establishing a Subsidiary vs. Employer of Record (EOR) in Kenya

Top Job Listing Sites in Kenya

Skuad offers access to an extensive talent pool in Kenya. Be it software developers or SEO specialists, our talent experts are always on the move to connect you with the best fit for your business. 

Apart from Skuad, other additional platforms that can help you to hire in Kenya include,

BrighterMonday - BrighterMonday is a popular job portal in Kenya that provides a platform for job seekers and employers to connect. It is especially known for offering various job listings across various industries. 

Snaphunt - It is a global hiring platform that enables employers to find and recruit the right talent for their organizations across various regions, including Kenya. One of the fantastic features of this portal is that it helps employers source talent based on city, country, and timezone, making the entire hiring process easy and efficient. 

Linkedln - Linkedln is another similar global hiring platform operating in Kenya, wherein employers can post their jobs to attract the right talent.

Compliance Risks of Hiring Employees in Kenya

When hiring in Kenya, businesses must be aware of and mitigate various compliance risks to ensure adherence to local laws and regulations. Here are some of the most common compliance risks of hiring employees in Kenya.

• Employment Contracts - Failure to provide written employment contracts or include terms not complying with Kenyan labor laws can result in serious legal repercussions. 

• Minimum Wage Compliance - It is crucial for every employer to regularly review and adjust employee salaries to comply with the minimum wage set by the Kenyan government. Non-compliance can lead to hefty penalties or other serious legal consequences.

• Employee Benefits - The Employment Act in Kenya makes certain employee benefits mandatory. This includes leave and overtime pay, among others. It is, therefore, the responsibility of every employer to ensure compliance with these regulations for the smooth running of their business. 

How to Hire Talent in Kenya

Mentioned below are a few effective ways by which you can tap into Kenya's skilled workforce.

Option 1: Establish a Subsidiary

• Overview - Setting up a separate legal entity in Kenya includes registering with relevant authorities, obtaining necessary permits, and establishing a physical presence. 
• Pros - Establishing a subsidiary offers maximum control over operations.
• Cons - It is time-consuming and involves significant initial costs, such as legal fees and office setup.

Option 2: Hire as a Contractor

• Overview - Involves engaging individuals on a contractual basis rather than as a permanent employee.
• Pros - Offers maximum flexibility in expanding or reducing the workforce based on project requirements. Furthermore, hiring contractors can also be cost-effective.
• Cons - Misclassification of contractors can lead to legal risks.

Option 3: Partner with an Employer of Record (EOR) - Skuad

• Overview - Partnering with Skuad to hire employees in Kenya involves outsourcing the employer's responsibilities, such as payroll, benefits, and compliance, to a third-party entity. 
• Pros - Allows for a faster setup; Skuad is well-versed in local regulations, reducing non-compliance risk.  In addition to this, Skuad assumes employer liabilities, thereby mitigating legal hassles for the hiring company. 

Hiring Trends in Kenya in 2024

The job landscape in Kenya continually evolves. Three major factors directly influencing the Kenyan job market are technological advancements, economic growth, and political stability.

In the last three years, there has been a significant increase in the global acceptance of remote work, and Kenya is no exception to this trend either. Companies in this foreign land have started to embrace flexible work arrangements to attract top talent and adapt to the changing work preferences. 

The pandemic has also highlighted the importance of the healthcare industry, and investments in this sector have increased drastically, a trend which is expected to continue for the upcoming years as well. There has been an increase in demand for healthcare services and medical professionals, making this a good opportunity for those searching for job opportunities.

Lastly, the technology and e-commerce sectors have also been expanding in Kenya. This growth will likely drive demand in IT, software development, digital marketing, and e-commerce operations. 

Hiring in Kenya, made hassle-free with Skuad

Navigating the intricacies of the hiring processes in Kenya can be extremely challenging. But what if, instead of spending your valuable time and resources in this endeavor, you can utilize them to grow your business? 

With Skuad, you can easily streamline your hiring, payroll, and HR operations. Trusted by global leaders, Skuad is the number one choice for companies to employ talent across borders.

‍Book a demo with Skuad and elevate your hiring experience in Kenya.

FAQs

Q1: What is the employment law in Kenya?

Ans: The employment law in Kenya is a branch of the Labor Law that dictates the relationship between an employer and employee. It lays down all the rules and regulations about the basic rights and duties of employees and basic conditions of employment. The ultimate goal of the employment law in Kenya is to promote health and safety in the workplace and safeguard individuals against discrimination.

Q2: What is the 1/3 rule of salary in Kenya?

Ans: According to the Employment Act, employers in Kenya are not allowed to deduct any amount from a worker's basic pay that exceeds two-thirds of the total compensation. This means every employee should take home at least ⅓ of their basic salary.

Q3: How can I hire an employee from another country?

Ans: Hiring employees from another country effectively expands your small business into the ever-evolving global market. However, it involves a few crucial steps. These include obtaining the necessary certifications, interviewing prospective foreign employees, conducting work interviews, obtaining work visas, and complying with tax regulations. Alternatively, companies can also choose to partner with an Employer of Record like Skuad to employ talent across borders.