Kenyan lawmakers are raising concerns about violations of the Employment Act’s one-third salary rule, citing increased tax burdens and mandatory deductions introduced over the last two years. The Public Accounts Committee (PAC) of the National Assembly is now seeking discussions with National Treasury Cabinet Secretary John Mbadi to address the issue, which has left many civil servants with less than the legally required minimum take-home pay.
Rising Deductions and Their Impact
Since 2022, public sector employees have faced additional mandatory deductions, including a 1.5% contribution to housing initiatives and a 2.75% deduction for the Social Health Insurance Fund. These measures, coupled with pre-existing taxes and deductions, have pushed many civil servants to take home salaries that are below the one-third threshold of their gross pay.
The Employment Act, 2007, explicitly prohibits deductions exceeding two-thirds of an employee’s basic pay. However, auditor reports indicate that numerous state departments have breached this requirement. According to Auditor General Nancy Gathungu’s 2022-23 report, 131 employees in the Roads Department were found to have net pay below the legally mandated one-third of their basic salary.
Lawmakers Call for Policy Review
Butere MP Tindi Mwale, chairing the PAC, highlighted the urgency of addressing this systemic non-compliance. He attributed the problem to recent tax measures that have drastically reduced employees’ take-home pay, urging the Treasury to propose solutions. “It is time we engage with the National Treasury on why public servants are not complying with the law,” Mwale said during a committee session.
Lugari MP Nabii Nabwera echoed these sentiments, emphasizing the need for a structured dialogue with Treasury officials. Similarly, Rarieda MP Otiende Amollo called for a review of the current financial policies to reflect the evolving economic reality. “We need to engage so that we could recommend changes to the policy,” Amollo noted.
The lawmakers pointed out that the existing laws were not designed to account for the compounded effect of recent tax measures. They stressed that leaving civil servants with diminished pay undermines morale and productivity in public service.
Legal and Ethical Concerns
At the heart of the debate is the ethical and legal obligation to ensure public servants receive a fair portion of their earnings. The law stipulates that employees must retain at least one-third of their basic pay to cover essential personal expenses and maintain a decent standard of living.
Non-compliance with this rule has far-reaching implications, including potential legal challenges against the government by affected employees. The lawmakers are keen on averting such scenarios by proactively addressing the issue through legislative and administrative reforms.
Meeting with Roads Department Officials
The PAC’s concerns were reinforced during a meeting with Roads Principal Secretary Joseph Mbugua, where the Auditor General’s findings were discussed. Mbugua acknowledged the problem, citing difficulties in adhering to the law under the current fiscal policies. The PAC urged the ministry to work with the Treasury to align deductions with legal requirements.
Next Steps
The lawmakers plan to convene with Treasury CS Mbadi to chart a path forward. Proposed measures include reviewing tax policies, reevaluating mandatory deductions, and possibly amending the Employment Act to better reflect current economic realities.
While the government’s efforts to fund critical initiatives like universal healthcare and affordable housing are commendable, lawmakers stressed the need to balance these objectives with the well-being of civil servants. Ensuring compliance with the one-third salary rule is seen as a critical step toward restoring public confidence in the government’s management of employee welfare.
The PAC’s actions underscore a broader push to align fiscal policies with constitutional and ethical standards, ensuring that no employee is left bearing an unsustainable financial burden. As discussions with Treasury begin, all eyes will be on how the government addresses these pressing concerns in the face of mounting public discontent.
