Employers of Record (EORs) in Kenya offer valuable support for businesses aiming to expand their operations in the country. With a dynamic economy, a diverse workforce, and a strategic geographical location, Kenya presents numerous growth opportunities for businesses. EORs in Kenya possess extensive knowledge of local labor laws, ensuring compliance with regulations and simplifying legal complexities for companies. Partnering with a Kenya-based EOR enables businesses to streamline HR operations, manage employment agreements, and establish a strong foothold in the Kenyan market.

Kenya EORs enable employers to onboard local talent without the need to register their local entity. In addition to this, EORs also take care of compliance with local labor laws and eliminate any risks associated with employment.

In Particular, Kenya's labor laws have a few distinct features. These laws can stump even experienced foreign employers. For example, notice periods vary by service length. Kenya also makes severance pay mandatory for employees who have served the employers for after at least one year. Moreover, minimum wages in the country vary with region.

Violating any of these laws can bring heavy fines for employers. Partnering with a Kenya EOR like Gloroots, can help you navigate these challenges effectively. By working with an EOR, you acquire highly experienced legal and compliance professionals to ensure you compliantly onboard employees.

The pricing of Kenya EOR/PEO services can vary based on factors like the number of employees, the extent of required services, and project complexity. Typically, pricing structures involve a monthly fee per employee or a percentage of the employee's salary. Additional charges may apply for supplementary services or customization as needed.

Key Metrics For Foreign Employer 

With its vibrant economy, diverse talent pool, strategic location, and abundant natural resources, Kenya offers an ideal environment for career development and business success. 

The table below depicts key indicators from the Global Talent Competitiveness Report for employers wishing to hire from Kenya.

‍Source: The Global Talent Competitiveness Index 2023‍

Through Gloroots' Recrew platform, you can seamlessly connect with exceptional talent in Kenya and efficiently expand your team.

Proper employee classification is crucial for businesses operating in Kenya. Misclassifying workers can lead to legal risks and financial penalties. Collaborating with a reputable PEO/EOR in Kenya is a wise decision to safeguard your business.

Engaging a PEO/EOR ensures compliance with Kenyan labor laws, accurate employee classification, and efficient payroll processing. These experts handle comprehensive benefits, ensuring your workforce receives the necessary legal protections and entitlements. By entrusting employment obligations to trusted professionals in Kenya, you can focus on your core business operations with peace of mind.

Kenya’s labor laws are informed by a variety of sources:

• The Constitution of Kenya (2010)
• The Employment Act (2007)
• The Labor Relations Act (2007)
• The Labor Institutions Act (2007)
• The Occupational Safety and Health Act (2007)
• The Work Injury Benefits Act (2007)

These laws govern various aspects of employment such as working hours, minimum wages, workplace safety,  contributions to employee pensions and medical funds, etc.

Employment contract

In Kenya, employment contracts are governed by the Law of Contract Act, 2002 (revised 2012). 

The contract should be presented in a language that the employee can understand, and it can be of a fixed or unlimited period. With a fixed contract, the employment ends automatically at the specified period, regardless of dismissal or resignation.

Get an overview of what you need to know when hiring in Kenya. Contact us.

Working hour 

In Kenya, the regular workweek consists of 45 hours per week. According to the New Labour Law, employees are not allowed to work more than 56 hours per week, and the maximum overtime per day should not exceed 4 hours. Additionally, there are new regulations governing shift work patterns.

Overtime

Employees receive overtime compensation at 150% of their regular pay rate. As per the New Labour Law, employers must offer additional pay to employees working during night hours (between 10 pm and 6 am) if they do not receive time off in lieu. The pay should be at least 1.2 times the regular hourly salary.

Minimum Wage

The monthly minimum wage in Kenya, ranges from 13,572.90 KES to 30,627.45 KES based on the location

Annual Leave

In Kenya, employees are entitled to an annual leave or earned leave. for a period of 21 days. It is an essential aspect of labor regulations in Kenya, ensuring that employees have sufficient time for leisure and personal commitments.

Maternity Leave and Paternity Leave

Female employees are entitled to three months of maternity leave, during which they receive 100% of their regular pay rate. To avail this leave, the employee must inform her employer at least seven days in advance of her intended leave and provide a medical certificate.

In cases of adoption, the same laws governing maternity and paternity leave are applicable. However, in this scenario, the employee is required to give 14 days' notice to their employer instead of the usual seven days.

Male employees are eligible for a two-week paid paternity leave.

Sick Pay

Employees who have completed two consecutive months of service are entitled to sick leave for not less than seven days at 100% of their regular salary. 

Subsequently, they can avail an additional seven days at 50% of their typical salary rate per year. 

However, for any sick leave taken, employees must provide a valid professional medical certificate confirming their incapacity to work.

Income tax

SOCIAL SECURITY AND OTHER TAX 

Termination Process

Employers have the right to end a fixed-term contract based on business, personal, or worker misconduct reasons. Termination necessitates prior notice and a written explanation. In cases of misconduct, a warning must be given, allowing the employee an opportunity to provide an explanation for their actions.

Upon the employer's initiation of employment termination, final wages must be paid on the termination date. If the employee's tenure exceeds one month, the employer is also required to furnish a certificate of employment.

Notice Period

In Kenya, notice periods for termination are as follows:

• Employees terminated during the probationary period should be provided with a minimum of seven days' notice.
• For employees paid on a monthly or longer basis, they must be given at least 28 days' notice of termination.

Severance Pay

Severance pay is calculated at 15 days' worth of wages for each year of service and is applicable only when termination occurs due to redundancy. In cases of termination for reasons other than redundancy, service pay is provided at the same rate as severance pay.

Probation Periods

In Kenya, the probation period lasts from three to six months. If the employer decides to terminate the employee during this period, they must provide seven days' notice or payment in lieu.

As of 1st January 2022, the New Labour Law mandates that an apprentice's base salary should be no less than 70% of a full-time employee's base salary for the same type of work. For probationary workers, their base salary must be equivalent to the base salary of employees in the same position.

When hiring globally, ensuring compliance can be a daunting task, particularly when dealing with various employment laws, payroll procedures, DE&I compliance, GDPR, and data protection regulations. Keeping up with the ever-changing compliance landscape and setting up infrastructure can be challenging.

At Gloroots, we offer a comprehensive solution to minimize these complexities. Our integrated platform provides a single window to manage all hiring and onboarding tasks. Our in-house experts are well-versed in cross-border employment and payroll compliance, ensuring that your employment contracts, payments, and benefits are fully compliant with Kenyan regulations.

We strive to provide you and your employees with a stress-free global employment experience. Contact our experts today to kickstart your global hiring campaign in Kenya.

Tap into growth opportunities in Kenya with the expertise of Gloroots as your reliable Employer of Record (EOR). Our comprehensive services manage payroll, taxes, benefits, and compliance, allowing you to prioritize your workforce and drive company expansion.

Partnering with Gloroots' Kenya EOR enables you to streamline operations, mitigate risks, and ensure compliance with Kenyan employment regulations. We handle the complexities of cross-border employment, ensuring a seamless expansion experience in Kenya. With our support, you can focus on talent acquisition and team growth while entrusting compliance and payroll intricacies to us. Rely on Gloroots to navigate the Kenyan labor market and unlock your business's full potential.