April 13, 2021

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New law imposes fines of Kshs 1M on employers who withhold salaries

2 min read

Did you know that your employer is liable to pay you one million shillings as a fine for wrongfully withholding or deducting your salary? 

This is according to the new Employment Amendment Act 2019 that raised the penalty from 100,000 shillings with the law also setting gratuity pay for during termination of a contract at not less than 15 days per year.

The new Employment Amendment Act of 2019 amended the Employment Act of 2007, in measures aimed at introducing fairly progressive labor practices in line with current global trends. 

Among other major amendments, the new law stipulates that an employer who wrongfully withholds or deducts a worker’s salary is liable to be fined up to a million shillings. 

The amended law also delegalizes non-compete laws which are in some instances termed restrictive covenants. 

This will give employees rights to work for any other company or venture into businesses with similar undertakings with their previous employer. 

An employee who resigns or whose contract comes to an end is only mandated to guard information regarding the previous employer for only a reasonable period. 

The new law also states that in case of a transfer, merger or sale of a business, the deal should not automatically lead to the loss of employment or redundancy. 

It further states that an employee’s rights will continue existing after the death of an employer and the personal representative of the deceased employer will have the responsibility of exercising it.

A redundancy situation will however arise where a business ceases to exist. 

The new act also introduces a one month maternity leave in case of a stillbirth. 

To further enhance safety in work place employers with five staff members are required to have a sexual harassment policy. 

Previously, the threshold for a sexual harassment policy was organizations with at least 20 employees. 

Sick leave will be at a maximum of 30 days with full pay and 15 days on half pay for all employees in a year and not only staff who have worked for more than two months. 

During dismissal, an employer must provide an employee with a written statement of the reasons for the dismissal. 

During termination of a contract a gratuity pay of not less than 15 days per year is mandatory.

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