Lawmakers in Kenya are contemplating changes to the Employment Act from 2007 with the aim of eliminating the one-third salary rule. They argue this adjustment is necessary due to heightened tax deductions under President William Ruto’s leadership.

The National Assembly Public Accounts Committee (PAC), led by Tindi Mwale of Butere, has expressed reservations about the regulation, pointing out that multiple government agencies have already violated this stipulation, rendering its implementation unfeasible.

In the last couple of years, Parliament has enacted several new compulsory tax laws, causing numerous workers to face increasingly smaller salaries.

The Auditor General’s report for the fiscal year 2023/2024 indicated that twenty workers at the State Department for Irrigation were earning a take-home pay that fell short of the statutorily mandated threshold, which is one-third of their base salary.

Before the committee, Irrigation Principal Secretary Ephantus Kamotho addressed the problem, linking it to the recently implemented tax policies.

“The required steps have been implemented, and the concerned officers have been notified and instructed to adhere within 14 days. Should they fail to do so, disciplinary measures will be initiated against them,” Kamotho declared.

The financial pressure has worsened due to deductions like the 1.5 percent Housing Levy and the 2.75 percent compulsory Social Health Insurance Fund (SHIF). These reductions have notably cut into employees’ available income.

Given the situation, numerous employees are now teetering on or beneath the one-third mark of their minimum wage, which raises worries about their economic stability.

Lawmakers serving on an oversight panel are urging the National Treasury to collaborate with the Attorney General’s office regarding strategies to tackle the increasing issue of government employees receiving less than what is required by law—specifically, less than one-third of their designated salary.

These worries were highlighted in audit reports, indicating that many public sector workers are now finding themselves with earnings beneath the required level because of higher mandatory withholdings.

MP Lugari Nabii Nabwera cast doubt on the practicality of implementing this law within the present economic climate. He highlighted that recent parliamentary measures introducing additional levies in areas like housing, social health insurance (SHA), and the National Social Security Fund (NSSF) have placed significant financial pressure on civil employees, including members of parliament themselves.

“We sought guidance from the Treasury after implementing taxes on NSSF, SHA, and the housing industry. Numerous government employees had already allocated their wages accordingly. Is this regulation still feasible? We asked the Treasury to collaborate with the Attorney General to determine how best to address this matter considering today’s economic conditions,” stated Nabwera.

Funyula Member of Parliament Wilberforce Oundo sharply condemned the disciplinary actions taken against employees at the State Department for Irrigation, deeming them unjust and unsensitive.

“I strongly advise you to retract this memorandum from the staff. It is cruel, unjust, and entirely impractical. The employees were not responsible for implementing the housing levy, increased SHA rates, or higher NSSF contributions, nor did they cause the elevated cost of living that has led many to take out substantial loans,” asserted Oundo.

He went on to question the rationale of punishing staff members who are already facing significant financial hardships.

“What type of disciplinary measures do you plan to implement? Will they be terminated from their positions? Are you anticipating that they will have to liquidate their assets merely to cover their debts and align their incomes with regulations? Such actions would be unjust and cruel,” he stated.

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