What you need to know about the minimum wage
2 years ago
Labour Day in Kenya has become synonymous with wage increments; workers expecting increments and employers opposing any. This article sets out the legal position regarding minimum wage in Kenya.
To whom does minimum wage apply?
The minimum wage in Kenya only applies to the categories of workers captured in the order – they include, domestic workers, cashiers, receptionists, drivers, artisans, clerks, messengers, telephone operators, storekeepers etc.
All other workers must negotiate their rates of pay either individually or collectively through a union.
The wage orders are issued under the Regulation of Wages (General) Order. The primary law is the Labour Institutions Act, 2007 which establishes a number of key labour institutions including the wages councils.
The National Labour Board is charged with advising the CS Labour and Social Protection on all matters affecting labour and employment in the country, including advising on the appointment of the wages councils.
The Board is composed of many members including the most representative federation of trade unions (currently COTU) and the most representative federation of employers’ organisation (currently FKE).
The wages councils are appointed by the CS. Representatives of workers and representatives of employers form part of the general wages council (there is supposed to be another council for EPZ workers and for workers in the agricultural sector).
The wages council is supposed to: –
|investigate the remuneration and conditions of employment in any sector;|
|invite and consider written and oral representations from interested parties; and|
|make recommendations to the CS on minimum wage remuneration and conditions of employment.|
What the wages council should consider: –
Here is where it gets good – in making recommendations, the wages council is supposed to take into account: –
| (a) the needs of employees and their families, taking into account the general level of wages in the country, the cost of living, social security benefits and the relative living standards of other social groups;|
(b) economic factors, including the requirements of economic development, levels of productivity and the desirability of attaining and maintaining a high level of employment and the need to encourage investment;
(c) the ability of employers to carry on their business successfully;
(d)the operation of small, medium and micro enterprises;
(e) the cost of living;
(f) the alleviation of poverty;
(g) the minimum subsistence level;
(h) the likely impact of any proposed conditions of employment on current employment or the creation of employment; and
(i) any other relevant factor.
It gets better…
|Before publishing a wages order in the Gazette, the CS is supposed to publish a notice—|
(a) specifying that he proposes to make a wages order;
(b) specifying where copies of a draft of the wages order can be obtained; and
(c) inviting comments within a reasonable period on the draft wages order, which may not be less than thirty days from the publication of the notice.
|If objections are received, the CS is supposed to refer them, and any other comments submitted, to the wages council for consideration and advice.|
|After considering any further report of the wages council and any further advice from the Board, the CS may publish a wages order.|
Penalty for non-compliance
|An employer who fails to pay at least the statutory minimum remuneration commits an offence and shall be liable to a fine not exceeding Kes. 50,000/= or to imprisonment for a term not exceeding 3 months, or to both. |
The employer shall also be required to pay the employee the difference between the amount which ought to have been paid and the amount which was actually paid.
I cannot say for sure how operational the above provisions are but I do not recall ever seeing a notice published by the CS seeking comments on a proposed wage order (I stand to be corrected here).
With all the lobbying we see in the public arena, one would be excused in concluding that there is no other way of raising concerns on wage fixing.
Kenya has ratified the I.L.O Minimum Wage-Fixing Machinery Convention, 1928 (No. 26) and
1970 (No. 131) whose provisions emphasise the need for consultation on matters relating to wage-fixing.
It is a concern that the representations of employers are always seen as selfish; my question is — is the business/economic landscape in Kenya supportive of wage increments? If the economy is bad, why is that only employers have to bear the brunt of that? Have your say in the comments section below.
Click here for last year’s wages orders.
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