Kenya Employer of Record

If a lack of speed or local expertise are among your top concerns when expanding to or employing workers in Kenya, an employer of record may be the best option for achieving your global growth objectives.

An employer of record, sometimes known as an international PEO, enables you to quickly hire and onboard workers in Kenya―often in as little as two weeks―without having to take on the cost and risk of establishing a local entity.

Learn about the hiring, employment, payroll and benefits requirements for workers in Kenya and how our employer of record service, Global Employment Outsourcing (GEO), and local HR experts can help you manage your international employment needs.

Hiring in Kenya

Kenya’s population is ethnically diverse, with as many as 70 distinct ethnic groups as well as a large number of foreign nationals. Historically, politics and ethnic groups have been intertwined and there is a perception that those in power favor their own ethnic group over others. There have also been tensions between some ethnic groups. Becoming aware of the historical relationships and cultural differences among Kenya’s diverse population is of value to anyone doing business and hiring workers in the country.

Employment law in Kenya is regulated primarily by the Employment Act, the Labor Relations Act, the Labor Institutions Act and the Occupational Safety and Health Act.

Since employment in Kenya is highly regulated, compliant employment contracts are an essential business need. As your employer of record and PEO in Kenya, we can ensure that every contract, for every worker, meets all requirements. We can also provide you with guidance about cultural norms and hiring best practices and keep you up-to-date with employment regulations as they change.

Employment contracts in Kenya

As you look to hire employees in Kenya, here are some common regulations you’ll need to know to create a compliant contract, as well as how an employer of record and PEO can provide support for your unique HR needs.

Working hours
Regular work hours are eight hours per day Monday through Friday and five hours on Saturday, making a 45-hour workweek. It is legal to work up to 52 hours a week, or 60 hours for night work. Employees are entitled to one day of rest out of every seven.

Compensation
As you consider the appropriate salary to offer new employees, keep in mind:

Minimum wage varies based on profession, professional grade and location.
Professions are divided into 12 occupational groups, with group one receiving the lowest minimum wage and groups 11 and 12 tied for the highest wage. There can be multiple grades within an occupational group, and the minimum wage varies by grade.
Kenya is divided into three Minimum Wage Areas, each with its own minimum wage:
- Minimum Wage Area 1: Nairobi, Mombasa and Kisumu
- Minimum Wage Area 2: Mavoko (aka Athi River), Ruiru and Limuru
- Minimum Wage Area 3: all remaining territory in Kenya
Overtime work is compensated at 150% of normal wages for weekday work and 200% of normal wages for Sundays and public holidays. Additional overtime regulations apply to different sectors of the economy.
Collective agreements typically regulate the legal salary range for unionized employees.

As your employer of record in Kenya, we can provide you with resources and insights about employee compensation, so you are better equipped to make a competitive employment offer.

Bonuses
Bonuses aren’t required by law; however, many employers offer one or more of the following:

Christmas bonus
13th month bonus
Annual performance bonus
Production bonus

Probationary period
Probationary periods in Kenya generally do not last longer than six months unless the employee consents to a second six-month probationary period. Terminating probationary employment requires seven days’ notice or payment in lieu of notice.

Termination and severance
Employees with indefinite contracts who have worked for at least five years are entitled to at least one month’s notice of termination. Employees who have worked more than five years are entitled to at least two months’ notice.

To terminate an employee for gross misconduct, the employer must inform the employee about the misconduct and allow the employee to defend their actions. Employees may sue for damages if they feel the dismissal is unfair.

A contract with an end date may be terminated with the following notice:

A contract that requires wages to be paid daily: no notice
A contract that requires wages to be paid at intervals of less than one month: one pay period’s notice
A contract that requires wages to be paid at intervals of one month or more: 28 days’ notice from either party

The employer or employee may provide payment in lieu of notice.

An employer may waive an employee’s notice, but they are still required to pay the employee for the time they would have worked.

The Employment Act requires that employers provide employees who have worked for four weeks or longer with a certificate of service upon termination. Failure to do so subjects the employer to a fine of up to 100,000 Kenyan shillings and/or six months in jail.

Severance pay in Kenya is only mandatory in cases of redundancy, where 15 days of wages are required for each year of employment.

As your employer of record in Kenya, we can work with you to quickly handle the unforeseen event of an employee termination, providing legal guidance and a personalized process that ensures you stay out of labor court.

Employee benefits and paid leave in Kenya

When negotiating terms of an employment contract with a candidate in Kenya, here are some of the statutory benefits and paid leave requirements to keep in mind, as well as how an employer of record can support your company’s benefits strategy.

Maternity leave
Pregnant employees are entitled to three months of paid maternity leave and must give written notice at least seven days in advance. If an employer requests a medical certificate, the employee must provide one.

An employee may choose to take other kinds of leave (sick, compassionate, annual or any other leave) immediately following maternity leave.

Annual leave continues to accrue during maternity leave.

An employee on maternity leave cannot be terminated unless it is for cause.

Vacation
Employees are entitled to at least 21 days of paid annual leave after 12 months of employment. The employee must be allowed to take at least one two-week period of leave each year.

Collective agreements often require additional leave of between 30 and 45 days.

Holidays
Kenya observes 10 public holidays:

New Year’s Day
Good Friday
Easter Monday
Labor Day
Madaraka Day
Eid-ul-Fitr
Mashujaa (Kenyatta)
Independence Day
Christmas Day
Boxing Day

Employees who work on a holiday are entitled to double pay.

Sick leave
Employees are entitled to a minimum of seven days of sick leave with full pay followed by seven days with half-pay for every 12 months of employment. An employee may take this leave after a period of two consecutive months of service and must supply the employer with a certificate signed by a qualified medical practitioner confirming the inability to work.

Employees pay into the National Hospital Insurance Fund (NHIF) each month, which in turn reimburses employers for sick leave expenses. The NHIF also reimburses insured employees and their dependents for up to 432,000 Kenyan shillings a year for costs incurred at private and faith-based hospitals.

Health coverage
Healthcare in Kenya is offered by a variety of providers both public and private, and funded by various means.

Public healthcare is funded by a mixture of government revenues, donor funds and employee contributions to the NHIF. Membership in the NHIF is mandatory for Kenyans 18 and over. Formal employees contribute monthly based on their income while informal employees pay a voluntary monthly flat rate premium.

Private healthcare is funded via out-of-pocket payments made directly to providers as well as private health insurance, although very few Kenyans have private health insurance.

Employers are required to provide healthcare for their employees. Most employees are covered by the NHIF, which reduces the burden, but some employers also offer private health insurance.

As your employer of record in Kenya, we may be able to provide optional supplementary medical insurance coverage for professionals and their dependents at a more cost-effective rate.

Pension
Under the National Social Security Fund Act, all employers with at least one employee are required to register with the pension fund, and membership is mandatory for all employed persons between the ages of 18 and 60. Employees are eligible to receive retirement benefits at age 60.

Employees contribute 6% of their monthly salary and employers contribute 6% of total monthly payroll.

Foreign nationals working in Kenya are exempt from participation if they are covered by a social security treaty (totalization agreement) or if they have worked in Kenya for less than three years and are covered by an equivalent program in their home country.

Workers’ compensation
Employees who earn more than 4,000 shillings a month are covered by the employer-liability system, which is funded entirely by employers. There is no qualifying period for eligibility.

Compensation is calculated as follows:

For a temporary disability: 50% of daily wages, up to 540 Kenyan shillings a day after a three-day waiting period. (If the disability lasts longer than three days, the award is paid retroactively.)
For a partial permanent disability: a lump sum equal to 60 months of the employee’s earnings up to 240,000 Kenyan shillings.

Employer social costs will cover a large portion of employee benefits in Kenya, but we can consult with you about supplemental coverage options, such as additional pension contributions or life insurance, if needed.

Employee onboarding with an employer of record in Kenya

We write and validate all local employment contracts, streamlining the onboarding process for you and your Kenya employees—all you have to do is provide relevant information and review and approve the employment agreement.

As your employer of record in Kenya, we will:

Schedule a welcome call to discuss HR and employment information for Kenya, as well as answer any questions
Prepare a customized employment contract in English and in Swahili (or other local language)
Share the employment contract and benefits information with the new employee for signature and review
Gather tax and banking information from the employee to set up payroll
Provide a local point of contact to the employee to answer any questions regarding their employment, local HR or payroll

The entire onboarding process for the employee is often completed in as little as two weeks.

Partner with Safeguard Global as your Kenya employer of record and PEO

With over a decade of service, we are the longest-serving employer of record and PEO provider in the international market. Organizations around the world rely on Global Employment Outsourcing (GEO) to expand and hire in over 179 countries around the world, quickly and compliantly.

We’ve seen just about every global employment circumstance imaginable—and with our extensive knowledge of local law and culture, we know what it takes to get employment right in Kenya. We provide written contracts in the local language, salaries in the local currency and HR support in your employees’ time zone.

Additionally, as a global payroll provider we support payroll administration—including payments, filings and other calculations—in more than 150 countries and can accommodate the payroll outsourcing needs of any size organization.

Whether you’re looking to hire as part of a strategic expansion or to meet specific talent needs, our global solutions advisors can walk you through your international hiring options so you can make the right choice for your organization. Contact us today.

The information provided on or through this website is for informational purposes only and does not constitute legal advice. Safeguard Global expressly disclaims any liability with respect to warranty or representation concerning the information contained herein, including the lost essence, interpretation, accuracy and/or completeness of the information in transit and language translation.

Learn more about Global Employment Outsourcing

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