Kenyans could see their payslips shrink further over new Unemployment Insurance Bill
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Employed Kenyans could see their payslip shrink further if a proposal seeking mandatory contributions to the Unemployment Insurance Fund sails through
Employed Kenyans could see their payslip shrink further if a proposal seeking mandatory contributions to the Unemployment Insurance Fund sails through.
After tabling of the Unemployment Insurance Bill 2022 to the parliamentary budget office on Thursday for review, salaried Kenyans could be subject to additional monthly deductions.
Employers and employees will contribute each month to the fund under the bill sponsored by Ikolomani Member of Parliament Bernard Shinali.
The bill proposes employees contribute 1% of their pay, matched by 1% by the employer towards the fund.
Shinali also proposed the establishment of the Unemployment Insurance Authority with a board comprising of a chairperson and nine members.
The authority will administer the fund and advise the respective Cabinet Secretary (CS) on unemployment insurance policies and legislation.
Shinali in the bill indicates that the Fund was inspired by South Africa where employer and employee are deducted 1 per cent each.
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“The objective of the proposal is to provide for the payment of unemployment benefits to employees who become unemployed or their beneficiaries by proposing to establish the Unemployment Insurance Fund to which both the employer and employee will contribute,” the bill reads in part.
According to Shinali, this will make it easier for jobless individuals to get by during challenging socioeconomic times.
The fund will be replenished in addition to salary deductions by parliamentary appropriations from the national government, county government funding, as well as gifts and grants from international organizations.
Should the Shinali-sponsored bill pass in parliament, the Treasury Cabinet Secretary will have powers to exclude certain cadre of employees from the mandatory salary deduction.
This will be made through the advice of the Salaries and Remuneration Commission (SRC) which sets salaries for state officers and public servants.
Kenyans who will be able to enjoy the benefits of the kitty are those aged between 15-64 years and have been unsuccessfully looking for work for four consecutive weeks.
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