Whether you run a small shop in Nakuru or a growing company in Nairobi, Kenya's Employment Act, 2007 applies to you. Ignorance of the law is not a defence — and the Employment and Labour Relations Court has ruled against many employers who simply didn't know the rules.
Here's what every employer needs to understand.
Written contracts are not optional
Every employee working for more than a month must have a written contract. The contract must state the nature of the work, the pay, working hours, and leave entitlement. Verbal agreements leave you exposed.
Termination must follow due process
You cannot dismiss an employee without notice or valid reason. The law requires that termination be both substantively fair (there must be a genuine reason) and procedurally fair (the employee must be heard before a decision is made). Skipping either step can result in compensation orders against you.
Leave entitlements are a legal right
Employees are entitled to a minimum of 21 days of annual leave after 12 months of continuous service. Maternity leave is 3 months on full pay. Paternity leave is 2 weeks. These are minimums — you can offer more, but you cannot offer less.
Working hours and overtime
The standard working week is 52 hours. Any work beyond that must be compensated, either through overtime pay or time off in lieu. Night work and public holiday work also attract additional pay.
Statutory deductions are mandatory
Every employer must deduct and remit PAYE, NSSF, and SHIF (formerly NHIF) on time. Failure to remit attracts penalties from KRA and the relevant bodies. These are not optional even for small employers.
Discrimination and sexual harassment are prohibited
The Act prohibits discrimination in hiring, promotion, or dismissal based on race, sex, pregnancy, marital status, religion, or disability. Employers are also required to have a sexual harassment policy in place.
The bottom line: Non-compliance is not just a legal risk — it damages your reputation as an employer and makes it harder to attract and retain good staff.
Bomi Business Solutions can help you review your employment practices and bring them into full compliance with Kenyan law. Reach out to our team today.