Employment Laws in Kenya: A Guide for US Companies Hiring Abroad

With its vibrant tech industry, Kenya is an increasingly popular place for US companies to hire remote workers. Learn the key employment laws to keep in mind when hiring there.

Caitlin MacDougall
Caitlin MacDougall
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Amidst its scenic landscapes and bustling cities like Nairobi and Mombasa, Kenya is becoming an increasingly desirable place for companies to set up a global team. In 2022, Google announced plans to open a product development center in Nairobi, and they're not the only tech company with their sights on Kenya: Visa has also set up an innovation hub in Nairobi, and Microsoft launched a research and development center as well.

Although Kenya has historically lagged behind other countries in adopting the internet, times are changing, and more infrastructure has been put in place to bring the country up to speed. Currently, Mombasa is rated as having the fastest internet in Kenya at 32.12 Megabytes per second (Mbps), followed by Nairobi with 21.79 Mbps. For US companies that want to hire remote workers in Africa, they are more likely going to find professionals with strong technology resources in those cities.

But internet access isn't the only aspect of hiring remotely to consider. As in every country, Kenya has its own set of employment laws that must be heeded in order for your company to stay in compliance.

Employment law in Kenya is governed by the general law of contract, as well as common law. While some laws have been passed to address the specifics of an employment contract, employment is treated as an individual relationship negotiated between the employer and the employee. In this article, we will review the specifics of employment laws in Kenya, including various types of employment contracts and regulations.

Photo of Mount Kilimanjaro from Amboseli National Park

Terms and conditions of employment contracts 📃

There are a few important acts in Parliament that an employer hiring in Kenya should note.

The Employment Act and the Regulation of Wages and Conditions of Employment Act

These acts define the basic conditions of employment. This includes rules governing wages, safe and reasonable working conditions, leave, and basic rights. They also regulate the termination of employment, particularly as it relates to women and children.

Forced labor

The Employment Act of Kenya defines forced labor as work that is involuntary and enforced by threat of penalty. It is not:

  • military service
  • civic obligations
  • work enforced by a court of law as punishment, as long the work is supervised by a public authority
  • emergency work or services, such as in the event of a natural disaster or war.
  • community service

Section 4 of the Employment Act makes it illegal to force labor, or aid in the coercion, recruitment, or trafficking of a person for labor.

Working hours ⏰

Workers in Kenya are allowed to work a maximum of 52 hours during the daytime (or 60 hours of night work) before they must be paid overtime. Overtime must be paid at 150% of the worker's hourly rate. If a worker isn't paid on an hourly basis, their rate is calculated at 1/225 of their basic minimum monthly wage.

Minimum wage 💰

Kenya does not have a general minimum wage; instead, different wages apply to different groups of workers, depending on that group's skillset, working conditions, and job description. Agricultural workers are paid at a different level than teachers, for instance.

Recently, Kenya increased its minimum wage for public and private sector employees after the Federation of Kenya Employers (FKE), the biggest trade union in Africa, pressured President Uhuru Kenyatta for a raise. While this development benefits many workers in Kenya, only 17% of the workforce in Kenya is formally employed; therefore, a vast majority of the country will not benefit from the wage increase.

Employment laws in Kenya allow for different types of paid leave, including annual leave, leave for holidays, sick leave, and parental leave.

Annual leave

After 12 consecutive months of working for an employer, an employee is entitled to annual leave. After the 12-month cycle, the employee must be granted 21 working days of leave with full pay. While 21 days is the minimum amount of paid leave for Kenyan employees, some collective agreements allow for longer annual leave periods—sometimes up to 45 days.

If an employee has been working for the same employer for less than 12 months, they are entitled to a pro-rated leave.

An employer may only replace annual leave with payment in the case of an employee's termination, where an employee has accrued annual leave but is dismissed before the leave is scheduled.

Public holidays 🎊

Kenyans celebrate 14 public holidays, some of which honor Christian traditions, Muslim traditions, and Kenyan history. The holidays celebrated in Kenya are:

  • New Year's Day (January 1)
  • Moi Memorial Day (February 11)
  • Good Friday (Friday before Easter)
  • Easter Monday (date varies according to lunar cycle)
  • Labor Day (May 2)
  • Eid al-Fitr (date varies according to lunar cycle)
  • Madaraka Day (June 1)
  • Eid al-Adha (July 10)
  • Huduma Day (October 10)
  • Utamaduni Day (October 10)
  • Mashujaa Day (October 20)
  • Diwali (October 24)
  • Jamhuri Day (December 12)
  • Christmas Day (December 25)

If Christmas Day falls on a weekend, the Monday after December 25th is also considered a public holiday.

Sick leave 🤒

Workers are entitled to paid sick leave, which amounts to 14 days per year after two months of continuous employment with the same employer. To receive the sickness benefit, a signed certificate from a medical professional is required. For the first seven days of sick leave, the employer pays the employee 100% the employee's normal rate. The last seven days are paid at half the employee's normal rate. Dismissing an employee during their sick leave is considered unfair dismissal and is against Kenyan law.

Maternity leave and paternity leave 🤰

In Kenya, mothers are allowed three months of maternity leave at 100% regular pay. She may also supplement this leave with her annual leave, as well as her sick leave.

In order to qualify for maternity leave, a mother must give her employer a notice period of at least seven days before she intends to take the leave. Just as employees are required to produce a certificate from a medical practitioner confirming an illness for sick leave, mothers must produce a certificate from a practitioner to confirm their pregnancy. Fathers are allowed two weeks of paternity leave in Kenya.

An employer may not dismiss an employee while that employee is on maternity leave. The female employee has a right to return to the same job that she had before leave, or a similar position with the same conditions. Dismissing a female employee while she is on maternity leave, or demoting her to a less favorable position, is grounds for discrimination.

Photo of skyscrapers and other buildings in Nairobi

Discrimination

Discrimination in the workplace is addressed in section 5 of the Employment Act. Employees may not be discriminated against on the basis of:

  • race
  • sex
  • color
  • religion
  • political affiliation
  • language
  • ethnic or social origin
  • pregnancy
  • mental condition
  • disability
  • HIV status

Employers may not discriminate against their employees in any part of the employment process, including the recruitment process, training, creating the terms and conditions of employment, promotions, or termination of the employment contract.

Sexual harassment

Sexual harassment is addressed in Section 6 of the Employment Act: sexual harassment is defined as implied or explicit requests for sexual activity in exchange for preferential treatment, threat of discriminatory treatment, or threat of firing or demoting an employee. Sexual harassment can look like language that is sexual in nature, physical touching, or visual materials that have a negative impact on an employee's employment, enjoyment of their job, or performance.

Dismissal rights

Under the Employment Act, an employer must give an employee reason for the employee's termination if they intend to dismiss that employee. An employer may dismiss an employee due to gross misconduct, poor performance, worker redundancy, or an employee's breach of the conditions of employment. The official reasons for termination under Kenyan law are termination by notice, summary dismissal, and termination on account of redundancy.

Termination by notice

With termination by notice, both the employer and the employee are required to give a notice period if they wish to terminate the contract of employment. Each party is also entitled to severance pay if the other party does not provide notice.

Summary dismissal

Summary dismissal occurs typically when an employee has breached the conditions of their contract of employment, or has engaged in gross misconduct. The employee may claim unfair termination, or dispute the evidence provided by an employer. Because of this, the employer must provide ample evidence that the dismissal was justified and that a fair dismissal procedure was followed.

Termination on account of redundancy

If an employee is part of a trade union and is terminated because of a redundancy, the  employee's trade union must be notified of the redundancy at no less than a month prior to the day of termination.

If an employee is dismissed without just cause, that employee may present a claim to a labor officer or take their claim to the industrial courts.

Photo of flamingos in the water and in flight above water in Lake Nakuru National Park

The Occupational Health and Safety Act ⛑

Employers must provide a safe work environment for their workers. This includes providing procedures for the handling, use, transport, and storage of materials, as well as the proper training and supervision to ensure the safety of workers. Workers must be informed of work hazards and risks, and the proper facilities and arrangements must be provided for workers to guarantee their safety while performing the job's duties.

Labour Relations Act

This act protects a worker's ability to associate with or join trade unions, and it also protects their right to participate in a lawful strike. The Act encourages collective agreements between trade unions and employers, and efficient dispute settlements that promote equitable treatment of workers and economic progress.

The Work Injury Benefits Act (Cap. 253) 🤕

Certain laws apply for workers who are injured or who become disabled from a work-related activity. The injuries are divided into three categories: permanent incapacity, temporary incapacity, and fatal injury leading to a worker's death.

If an insured worker is permanently incapacitated or disabled on the job, they must be granted 96 months’ worth of wages in one lump sum. An insured worker with a partial work-related disability is granted 60 months of their wages, up to 240,000 shillings.

Temporary disablement benefits may be granted to an insured worker if a medical board certifies the injury. Three days after the certification, the worker may receive 50% of their average daily earnings. This payment is capped at 540 shillings.

Survivors of a worker who died from a work-related injury must be given a lump-sum of 60 months of the deceased worker's earnings. Funeral costs are covered by a funeral grant. If there are no dependents, the employer must still pay 20,000 shillings for the funeral costs.

Contracts of employment 📑

Contracts of employment may be verbal, but must be accompanied by a written contract, unless an employee is employed for only a few days. Any contracts that are longer than three months must be written. This written contract is called a "written statement of particulars." In these statements, an employer must provide these details:

  • employee's name
  • employee's age
  • permanent address of the employee
  • sex of the employee
  • employer's name
  • date of the start of employment
  • job description
  • place of work
  • work hours
  • type of contract, and whether it is for a fixed period or unspecified period
  • rate of pay, and schedule in which employee will be paid
  • worker benefits

There are four different types of contracts of employment for workers in Kenya: a contract for an unspecified period of time, a contract for a specified period of time, a contract for a specific task, and a contract for casual employment.

Contract for an unspecified period of time

An employment contract where there is no fixed period of employment is considered to be indefinite. While the employer and employee may terminate the contract at any point with notice, employers must comply with a workers’ tenure restrictions if a collective agreement specifies it.

Contract for specified period of time

If an employment contract specifies a fixed period, or a specific end date, the employer-employee relationship automatically ends on that date. Such a contract may be extended for a longer period, but no longer than a month.

Contract for a specific task (piecework employment)

This is akin to contract work, where a worker is hired for a specific task or project, and once the task or project is complete, the contract ends.

Contract for casual employment

Casual employees are those who do not work for more than twenty-four hours at a time. They are paid at the end of the day.

Photo of a dirt road in the savannah, with clouds in distance, Maasai Mara National Park

The importance of compliance ✅

Compliance varies from country to country, making it challenging for global businesses to stay on top of employment laws. Partnering with a company that specializes in the different aspects of international compliance can prevent oversteps in employment regulation that can lead to legal trouble and costly fines.

How Pilot Can Help 🙋‍♀️

With Pilot, we can assist your company with everything you need to hire abroad, including payroll, benefits, and compliance for remote teams. We can help your company with administering payroll, classifying workers, and securing work permits.

We make payroll simple at Pilot: unlike other payment platforms, we don't mark up exchange rates for payments, and we don't require that international contractors use an e-wallet to access their funds, either. Instead, funds go straight to your workers' bank accounts. Our payroll system covers over 240 countries around the world, which means you can hire the best talent no matter where they live.


Interested in learning more about Pilot? Schedule a demo with one of our experts.


⚖️ Legal Disclaimer: The information contained in this site is provided for informational purposes only, and should not be construed as legal advice on any subject matter.


Cover photo of a pool and domed bar, Mombasa, by Harshil Gudka on Unsplash

Photo of Mount Kilimanjaro from Amboseli National Park by Sergey Pesterev on Unsplash

Photo of buildings in Nairobi by Joecalih on Unsplash

Photo of flamingos, Lake Nakuru National Park, by Bibhash Banerjee on Unsplash

Photo of Maasai Mara National Park by Pop & Zebra on Unsplash

Caitlin MacDougall
Caitlin MacDougall
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