In accordance with the provisions of the Labour Institutions Act 2007, workers' salaries must at least be equal to the minimum wage, ensuring every worker a decent standard of living consistent with the human dignity.
The National Labour Board, a tripartite body, is entrusted with the responsibility to advise the Labour Minister on, inter alia, appointment of wage councils. The wage rates are determined by Wage Councils constituted in accordance with Labour Institutions Act 2007. The wage councils are again tripartite bodies with worker, employer and independent experts representation. The members of the wages council are appointed for a period of three years. A wages council is entrusted with the function to investigate remuneration and conditions of employment in any sector; invite and consider written and oral representation, in prescribed manner, form interested parties; and make recommendations to the Minister on minimum wage remuneration and conditions of employment. Wages are determined for agriculture as well as general sector workers by the Agricultural and General Wage Councils constituted under the Labour Institutions Act. On the recommendation of these Councils, the Minister may issue Wages Order setting minimum rates of remuneration. Minimum wages vary by occupational sectors, skill levels and geographical areas. While determining the minimum wage, the Wage Council should take into account the following factors: the needs of workers 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; 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; the ability of employers to carry on their business successfully; the operation of small, medium and micro enterprises; the alleviation of poverty; the minimum subsistence level; the likely impact of any proposed conditions of employment on current employment or the creation of employment; and any other relevant factor.
A wages order sets the minimum rates of remuneration; specify the types and manner of deductions as well as the maximum amount/percentage of deductions; maximum amount deducted from pay in respect of rations supplied by the employer; regulate task based and piece work; regulate outwork, casual work and contract work; and other related terms on remuneration.
The regulation of Minimum Wage Compliance-together with provision of the Acts is done via Labour Administration and Inspection Department in the Ministry of Labour. Part V of the Labour Institution Act, No. 12 0f 2007 provides for the appointment of a Commissioner of Labour, a Director of Employment and a Medical Officer and empowers them for the purpose of the Act. (Section 35 (1) (a)) In the Act the Labour Officers are empowered to monitor or enforce compliance with any labour law including Minimum Wage Order and other terms and conditions of employment(Section 35 (1) (a)).
Minimum Wage Compliance is regulated via Section 61 of Labour Institution Act, and Section 87 (1) of the Employment Act which stipulate that a person who disobeys any provision of the Acts which includes failing to adhere to guidelines on minimum wages and conditions of employment is a criminal offence-and shall be liable to penalty of KES 50,000 or 3 months imprisonment or both, together with payment of the amount that is due the employee (difference between minimum wage and the actual wages-Section 48 (3)).
Section 16 of the Employment Act, 2007 provides for an individual complaining about the wages to file a complaint with the labour officer and this complaint will be considered as a complaint filed under Section 87. Section 87 provides that besides fines or imprisonment to non compliance to Minimum wage, the employee is granted payment of the amount that is due to him. Section 49 of the Labour Institutions Act, 2007 Notwithstanding any provision of any written law, a labour officer may institute proceedings on behalf of and in the name of an employee for the recovery of a sum due from an employer to an employee by reason of the failure of the employer comply to.
Source: § 43-47 of the Labour Institutions Act 2007; the Regulation of Wages (Agricultural Industry (Amendment) Order 2013; the Regulation of Wages (General) (Amendment) Order 2013
Remuneration is the total value of all payments in money or in kind, made or owed to a worker arising from the employment of that worker. Labour Institutions Act defines remuneration as the amount paid or to be paid in cash to the employee by his employer clear of any deductions, except any deduction lawfully made.
The Employment Act 2007 regulates the payment of wages to all classes of workers. According to the Act, wages can be calculated on hourly, daily, weekly or monthly basis depending on the type of contract.
The Act requires the employer to pay a worker his wages in legal tender (Kenya Shillings) during the working hours at or near the place of work on agreed pay day in cash, cheque, money order or directly deposit the amount in that worker's bank account. Payment may be made to the person authorized by the worker to receive the wage on his/her behalf, in case of his/her absence.
Wages are due at the end of the day for casual employees; at the end of the employment period for workers engaged for a period not exceeding one month; at the end of month for workers employed for a period exceeding one month; at the end of period of or month, whichever is earlier, for workers who are employed for an indefinite period.
Payment of any allowance may be made with the worker's consent, provided that the allowance is for the worker's personal benefit and does not include any intoxicating spirit or noxious drug.
Whenever an attachment against the property of an employer is issued, the proceeds realized upon execution are paid to the court until a decree obtained with respect to worker's wages for a period of six months has been satisfied. However, this provision is not applicable when the employer is undergoing insolvency.
The employer may not compel or restrict the worker to spend his/her wages in a certain way for a particular purpose in a particular place. No wages are payable to a worker in respect of a period during which the employee is detained in custody or is serving a sentence of imprisonment imposed under any law.
Deduction of wages is prohibited in exchange for job placement. Wages may be deducted in cases including contribution to a provident fund; reasonable amount for damage/loss of employer’s property; amount not exceeding a day's wage where the worker is unlawfully absent; amount equal to any shortage caused by the negligence or dishonesty of the worker; amount paid in error to worker; deductions permitted by any written law; for amount requested by worker in writing for any cause; and amount due and payable by the employee and in accordance with the written terms of an agreement and any other amounts prescribed by law. The total amount of deductions made at any one time should be up to two-thirds of the worker’s wages or such other amounts as may be determined under the law.
An employer should provide pay slips to all workers at or before each pay day except casual employee or an employee engaged on piece-rate or task-rate terms or for any period not exceeding six months. These pay slips should contain certain particulars including the gross amount of the wages or salary of the worker; the amounts of any variable and statutory deductions from that gross amount and the purposes for which they are made; and where different parts of the net amount are paid in different ways, the amount and method of payment of each part-payment.
Source: §2, 17-21 of the Employment Act 2007; §50 of the Labour Institutions Act, 2007