The Senate wants the government to increase workers’ minimum wage by 50 per cent, citing the harsh economic times and a high revenue collection from Kenyan taxpayers.
According to the lawmakers, the government collects huge revenues from employees in form of taxes and other statutory deductions, therefore it is only fair to improve their remunerations.
If it sails through, the motion tabled on Wednesday, by Nairobi Nominated Senator Karen Nyamu, will see workers minimum wage increase by 50 percent, from Sh15,120 to to Sh22,680.
While presenting the motion pn the floor of the House for debate, Senator Nyamu expressed concerns that the minimum wages paid to Kenyan workers presently is extremely low.
“The current minimum wages for workers in Kenya is far too low for survival in the current harsh economic conditions and the deteriorating rate of inflation,” the motion read in part.
“Now, therefore, the Senate resolves that the current minimum wage be increased by 50 per cent and the Cabinet Secretary for Labour, in consultation with the wage council and in accordance with the Labour Institution Act, 2007 publish a new order to increase the minimum wage by 50 per cent.”
The legislator, who is also the vice chairperson of the Committee on National Security, Defense, and Foreign Relations, argued that labour is one of the most important factors of production, which plays a critical role in economic development.
She further pointed out that better remunerations motivate employees, which culminates in enhanced productivity, which in turn generates more revenue to the government in form of taxes.
Explaining the need for the proposed change, the motion states that “there exists a symbiotic relationship between the employer and the employee, where both acquire mutual benefits from each other, considering that workers form the largest part of the consumer base for most goods and services produced in any economy,.”
It adds that “better payments for workers means more productivity by the same workers, translating into increased returns by the employer as well as more revenues by the government” and that “the government collects huge revenue from employees in form of taxes and other statutory deductions”.
Last year, the government reviewed the minimum wage upwards, by 12 percent, which saw the lowest paid employee take home up to Sh15,120.
The lawmakers have petitioned the government to review the amount once more, particularly in the wake of the high cost of living.
The unbearable condition has been aggravated by runaway inflation, impacts of climate change and the recent move to increase statutory deductions such as the NSSF and the NHIF.
The motion comes barely a month after the appellate court greenlighted new NSSF rates, which saw workers’ contributions shoot up by at least 80 percent.
In the new directive, tier one employers and employees will each contribute Sh360 to the fund monthly, up from Sh200.
A proposal fronted by the NHIF early last year, to deduct higher contributions from employees, was met with stiff opposition from employers.
Federation of Kenya Employers director Jacqueline Mugo cautioned that higher rates would push up wage bills and weaken the capacity of businesses to create new jobs and sustain existing ones.
