SALARY HIKE

Win for workers as minimum wage increased by 12 per cent

The lowest paid workers will now get Sh1,620 more to earn Sh15,120

In Summary
  • The minimum wage had remained Sh13,500 in the last three years
  • Unbearable cost of living and high inflation cited as reasons for the hike
President Uhuru Kenyatta, Cotu Secretary General Francis Atwoli (on his left) at Nyayo Stadium during the Labour Day celebrations on Sunday, May 1, 2022
President Uhuru Kenyatta, Cotu Secretary General Francis Atwoli (on his left) at Nyayo Stadium during the Labour Day celebrations on Sunday, May 1, 2022
Image: CHARLENE MALWA

 

Kenyan workers had a reason to smile during this year’s Labour Day celebrations after the government increased the minimum wage by 12 per cent.

President Uhuru Kenyatta made the announcement on Sunday while presiding over Labour Day celebrations at Nyayo Stadium in Nairobi.

The lowest paid workers will now earn Sh1,620 more, which pushes the minimum wage to Sh15,120.

Before the increase, the minimum wage was Sh13,500 and the figure had remained the same in the last three years.

Uhuru noted that there has been a hike in the cost of living with inflation hovering around 5-6 per cent annually.

He said his administration fully appreciates “the critical contribution Kenyan workers have made to the economy during very difficult times.”

“As a caring government, we find there is a compelling case to review the minimum wages so as to cushion workers against further erosion of their purchasing power while also guaranteeing competitiveness of our economy,” he said

“I declare an increase of minimum wage by 12 percentage points with effect from 1 May 2022,” he stated.

This year’s event was marked under the theme: Job Creation, Peace, and Sustainability.

It was the first time the fete will be held in public after the Government lifted the strict Covid-19 regulations.

There were were fears to miss out on a pay raise for the fourth year in a row after recent talks between trade unions, Federation of Kenya Employers (FKE), Labour Ministry and Central Organisation for Trade Unions (COTU) collapsed.

Workers through their trade unions have been pushing for increased wages, but FKE had been insisting the government should first allow the economy to recover.

The government last announced a five percent increment in the minimum wage to cushion workers against inflation in 2018.

COTU secretary general Francis Atwoli said workers were expecting an increase of the minimum wage by 23.4 per cent.

“From 40 per cent, we negotiated and settled at 23 per cent. Please give workers that increment,” he said.

Atwoli further accused the Salaries and Remuneration Commission of being an impediment to better pay for workers.

“The SRC was established to play an advisory role and not set wages for workers. Employers and workers bargain collectively freely and fairly. They engage in give and take but the SRC then comes in to say no,” he stated.

He added that SRC has been undermining free and independent collective bargaining between employers and workers.

Federation of Kenyan Employers Executive Director Jacqueline Mugo said the state of the labour market continues to remain fragile with enterprises remaining closed while others struggling to get back to full operation.

She noted that a recent tripartite meeting of FKE, Labour Ministry and COTU failed to reach an agreement on minimum wage “due to the extreme challenges facing the labour market.’

“Employers understand the hardships workers are facing. However, employers seek wage structure that not only protects the lowest paid workers but also increases productivity and is economically sustainable,” she said.

“We take note of the high cost of living that is making life hard for us and certainly for those at the bottom of the scale”

Mugo asked the government to address high cost of fuel, disruptions in supply chains of essential commodities, low food production and unfavourable tax regime.

“We ask the government to revise income tax bracket and the tax relief to support low income earners. The tax bracket could be raised to lets say Sh35,000 and tax relief increased to Sh3,500 per month,” she said.

Uhuru further order Labour Cabinet Secretary Simon Chelugui to gazettes COTU’s nominee to the NSSF Board, Rose Omamo, on Wednesday.

“I order you, after the long holiday, I want to see that gazette notice. I am not requesting, mine is an order. It is COTU that requested”

Atwoli had appealed to the President to intervene and have Omamo gazetted saying wokers needed a representative at the board.