President William Ruto has announced a new salaries policy that will set equal pay for workers in public and private sectors, even as he defended extra pension and medical deductions that have shrunk pay slips.
Dr Ruto said a new wages and remunerations policy with proposals to eliminate disparities in pay in public and private sectors is currently before Cabinet and will be taken before Parliament for public participation.
“We must harmonise [salaries to ensure equal work] for equal pay … and which ensures that, even when we set minimum wage, we have a basis of how we arrived at it,” President Ruto said while presiding over the national Labour Day celebrations at Uhuru Gardens in Nairobi.
While he did not elaborate on policy details, the government’s proposal is likely to have a wide-ranging impact in Kenya’s employment sector, even as employers asked for at least a year before the government implements any new policy.
“We ask that, before any new changes are made, enough lead time — we are proposing one year — should be given to businesses to be able to plan and adjust their budgets and restructure their financial flows to meet these new costs,” said Federation of Kenya Employers (FKE) Executive Director Jacqueline Mugo.
Civil servants last secured a substantial pay rise in July 2017, when the Salaries and Remuneration Commission (SRC) released a new pay structure that also harmonised salary grades.
Under the new pay structure that benefited employees in both national and county governments, the SRC graded jobs in the public service into 19 categories, with the lowest employee in grade B1 earning a minimum of Sh14,442 and top earners in E4 pocketing a starting salary of Sh292,765 a month. The new structure was to be implemented in four annual equal phases with effect from July 1, 2017.
This followed a job evaluation exercise launched in June 2015 by then President Uhuru Kenyatta, which the SRC undertook based on the principle of “equal pay for work of equal value”
By 2020, there were approximately 885, 000 public servants, including those in the civil service, teachers, parastatal workers and those working for companies majority-owned by the State.
Yesterday, President Ruto also announced several policy shifts mainly on health and savings, as he defended higher deductions for the National Social Security Fund (NSSF), National Health Insurance Fund (NHIF) and Housing Fund.
Also Read: President Ruto’s full Labour Day speech
The Head of State said that, as from July, NHIF contributions will now be pegged at 2.7 per cent of a worker’s pay. Consequently, high earners will contribute up to Sh27,500 monthly while the lowest (those currently contributing Sh500 monthly) will pay Sh300.
The government also has indicated it will be signing at least 10 bilateral agreements in the coming months, as it implements its aggressive agenda to have more Kenyans take up jobs abroad.
This policy is informed by the quest to shore up to Sh1 trillion in diaspora remittances, currently Kenya’s highest foreign exchange earner.
“There are many countries expressing interest in our workforce. The chancellor of Germany will be here on Thursday where we will sign a bilateral labour agreement so that Kenyan workers get a chance to contribute to part of Germany’s labour force needs annually.”
“There are work opportunities in Canada, the US, UAE and other countries. We are signing 10 bilateral agreements in the next couple of months to open up job opportunities,” the President disclosed.
Labour Cabinet Secretary Florence Bore had earlier indicated that the government’s plan is to grow the number of Kenyans leaving the country for jobs abroad from an average of 400 weekly up to about 5,000.
Dr Ruto also spoke on the need to grow savings and create more jobs locally, indicating that, effective July, the government will build at least 100 housing units in every constituency to create employment across the country.
Also Read: Kenyans snub Labour Day celebrations
But, while this year’s Labour Day celebrations were big on promises, the government dashed workers’ hopes for an increase to the minimum wage for all cadres of employees to cushion them from the high cost of living that has ravaged households.
Both the President and the Labour minister avoided the subject while employers also expressed their reservations with an increase on wages at this time.
“Current economic times are hurting everybody. We request that you give the workers, however minimal, a small wage increase this year,” Central Organisation of Trade Unions (Cotu) Secretary-General Francis Atwoli had requested.
But Ms Mugo had also indicated that employers did not expect any wage increase this year, after the government last year raised minimum wage by 12 per cent.
“Looking at the current state of the economy, we should allow businesses to stabilise and that we facilitate the wages councils and the National Labour Board to meet and discuss so that we can advise the government on what can be done for next year,” Ms Mugo said.
The government has highlighted at least six priority areas of concern to grow jobs, including a Sh3 billion investment to complete construction of markets, establishment of five new Special Economic Zones (SEZs), roll out of the Hustler Fund for lending to businesses and establishment of digital hubs at the ward level to grow the online job market. BY DAILY NATION