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Objective of this article

There has been much celebration over the past week or so over the return of domestic workers after the Christmas break. We, clearly, appreciate the work done by our helps but are we taking care of them in terms of their retirement benefits and in the event that they fall sick?

This article addresses the obligation of employers to domestic workers in relation to deduction and remittance of N.S.S.F (social security) and N.H.I.F (medical insurance). At the end of the article, we shall touch on P.A.Y.E (income tax) as well.

A “domestic worker” is: –

A person employed wholly or partly in any private household as a cook, house help, waiter, butler, nanny, valet, chauffeur, bar attendant, gardener or labourer.

N.S.S.F

  • Applicable Laws

Article 43(1)(e) of our Constitution gives every person the right to social security.

The National Social Security Fund Act, 2013 came into force in 2014. It repealed the previous N.S.S.F Act, Cap. 258. Substantial portions of the new Act, including the parts which provide the new higher rates of contribution, are, however, not in force at the moment due to a court case filed by the Central Organization of Trade Unions against N.S.S.F. Consequently, the rates prescribed under the former Act still apply.

  • Registration

Both the employer and the employee are required to register under the scheme. It is the employer’s responsibility to ensure that his workers are registered.

An employee is any person who is employed under a contract of service – whether oral or written – for any period of time.

  • Contributions

Are supposed to be deducted at the time of payment of wages. A domestic worker is required to contribute Kshs. 200/= and their employer is required to contribute a similar amount.

The obligation is on the employer to deduct and remit the monthly contribution.

  • The benefits

Include a retirement benefit, survivor’s benefit, invalidity benefit, funeral grant and an emigration benefit.

  • Voluntary registration

Whereas registration is mandatory for an employer and an employee, a self-employed person may register voluntarily.

  • Consequences of non-compliance

It is an offence to fail to register and to evade making any payment due under the Act.

In a number of court decisions it has been held that an employer who fails to comply with the N.S.S.F provisions is liable to pay service pay at the time of termination of the employment. Service pay is calculated on the basis of 15 days’ pay for each completed year of service.

N.H.I.F

  • Registration

It is mandatory for every person whose income exceeds Kshs. 1,000/= per month (whether derived from salaried or self-employment) to be registered under the scheme. Employees make a prescribed standard contribution whereas those who are self-employed make the prescribed special contribution.

It is the employer’s responsibility to deduct and remit the contribution.

  • Contribution

Depends on the monthly earnings. The rates published in the N.H.I.F website (http://www.nhif.or.ke/healthinsurance/) are as follows: –

Up to 5,999 150
6,000 – 7,999 300
8,000 – 11,999 400
12,000 – 14,999 500
15,000 – 19,999 600
20,000 – 24,999 750
25,000 – 29,999 850
30,000 – 34,999 900
35,000 – 39,999 950
40,000 – 44,999 1,000
45,000 – 49,999 1,100
50,000 – 59,999 1,200
60,000 – 69,999 1,300
70,000 – 79,999 1,400
80,000 – 89,999 1,500
90,000 – 99,999 1,600
100,000 and above 1,700
Self Employed (special) 500

 

  • Consequences of non-compliance

It’s an offence to: – fail to register, to pay the contribution and to make a late payment.

  • How do you go about complying?

For both N.S.S.F and N.H.I.F, it is common for employers of domestic helps to request them to register as self-employed and for the employer to either remit the deductions directly to the relevant bodies or to request the employee to make the remittance and submit receipts to confirm this has been done. In light of the provisions stated above, strict compliance would require the employer and employee to register and for the employer to deduct and remit the deductions.

P.A.Y.E

Income tax is payable by any employee who earns Kshs. 11,180/= and above. The minimum wage for a domestic worker employed in Nairobi, Kisumu or Mombasa is Kshs. 10,954/= per month (exclusive of house allowance) or Kshs. 528/= per day or Kshs. 98/= per hour (daily and hourly rates are inclusive of house allowance). For domestic workers employed in all former municipalities, Mavoko, Ruiru and Limuru, the minimum wage is Kshs. 10,108/= per month or Kshs. 485/= per day or Kshs. 90/= per hour. For those employed in all other areas of Kenya, the minimum wage is Kshs. 5,845/= per month or Kshs. 297/= per day or Kshs. 55/= per hour.

If your domestic help earns the minimum tax threshold and above, it is your responsibility to deduct and remit the requisite income tax to the Kenya Revenue Authority.

Personal experiences

Please share your experiences or thoughts on this issue in the comment section.

As regards an employer’s general obligations to domestic workers, please see this previous post on domestic workers.

NOTE: THE MINIMUM WAGE WAS INCREASED BY 18% WITH EFFECT FROM 01/05/2017.

Follow us on Twitter for a daily dose of the Employment Laws.

 

About Anne Babu

Anne is an Advocate of the High Court of Kenya and the Founding Partner of Anne Babu & Co. Advocates. She has practiced employment law for over 10 years. She is a repository junkie and a lover of editing.

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Comments

  1. Daniel says:

    Dear Anne; there are some parts of Kenya that are very remote. Where even the nearest branch of NHIF or NSSF are very far, and when you employ casual staff they have no NHIF or NSSF registration. What would you do if you wish to employ them for just few weeks or months?
    Has an employer a right to discriminate against those people who dont have these registrations instead of carrying their burden? Thanks

    1. Anne Babu says:

      The obligation to make the deduction and remittance does not have any regard to location. I think you should consult the NHIF and NSSF offices for guidance.

  2. Redemptah Mwangi says:

    Can a retiree register for NHIF and how

    1. Anne Babu says:

      Anyone can register for NHIF. Inquire of the procedure from any NHIF office.

  3. Suzan says:

    Hi Ann.
    Thanks for being there to ever educate us on very important employment issues. My question is on expatriate staff (Kenyans employed by a Kenyan registered firm to work abroad) are they liable to statutory? could u also cover the area of foreign contracts of service in your blog?

    Thanks and regards
    Suzi

    1. Anne Babu says:

      You read my mind Suzi. The next post is actually on foreign contracts of service. That’s a great question, I’ll answer it in the post.

  4. Nancy says:

    Please help me get my services

    1. Anne Babu says:

      Visit the offices of the county labour officers at Nyayo House for assistance.

      1. irene says:

        Thanks Ann for this information… my question is for how long should you have worked to get Nhif..?

        1. Anne Babu says:

          It is not dependent on your length of service but on your having remitted all deductions on a monthly basis.

  5. Andrew Lihasi says:

    Hi, what should an employ do when the nssf and nhif are not being paid by employer?

    1. Anne Babu says:

      Report to the two respective bodies.

  6. Kevin says:

    Hellow We Are Greatful With Your Wark. Am At Kisumu County Am Kevin Onyango Ogada. How Can We Get More Formes.

    1. Anne Babu says:

      Thanks. Your last sentence is not clear.

  7. Dr Gichia says:

    Once you have a domestic worker , what else should be given.other than salary. Does an employer of a household expected to provide accommodation? Or should accommodation be part of package?

    1. Anne Babu says:

      You either give housing or pay a housing allowance or consolidate the salary.

  8. Mrs Shah says:

    I want to employ one person as house help for 2 hours per day how do I go about it? Can I keep the person on temperory basis? after 3 months does the person become permanent? Do I have to pay nssf and nhif? How about anual leave?

    I want to employ househelp on monthly basis she will work 6 to 7 hours daily meaning 42 hours per week instead of 52 hours. Can I deduct money for 10 hours per week?

    Please advice
    Mrs Shah

    1. Anne Babu says:

      The person employed for 42 hours should be paid for 42 hours and overtime for time worked in excess of 42 hours. I am not clear on where the deduction comes in.
      The person employed for 2 hours per day should be given a part-time contract with clear terms as to the hours of work. They do not convert to permanent workers. NSSF and NHIF are dependent on whether the amount paid at the end of the month meets the minimum threshold. See the websites for both organizations.

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