Kenya
Whistleblowing
Impact date: 26 March 2026 The Conflict of Interest Regulations, 2026 provide practical guidance on how concerns about conflicts of interest involving public officers can be reported and investigated. Individuals, including employees, may submit complaints to the relevant reporting authority or the Ethics and Anti-Corruption Commission (EACC) in person, in writing, by email, by telephone, through an anonymous reporting system or through a representative.
The Regulations also strengthen protections for whistleblowers and witnesses. Individuals who make a complaint or assist an investigation must not be subjected to harassment, discrimination, retaliation, victimization or other unfair treatment because they have reported a concern.
Employer implications/action needed Employers should ensure that employees are aware of the available channels for reporting concerns relating to conflicts of interest involving public officers and of the protections available to whistleblowers.
Employer risk While the Regulations primarily apply to public officers, employers should avoid any action that could be viewed as retaliating against an employee who raises a concern in good faith.
Recruitment of workers
Impact date: Awaited. The Bill was passed by the Senate with amendments and referred to the National Assembly. The Labor Migration Management Bill, 2024 is a Bill that was introduced by the Senate. The Bill was first published on 21 March 2024 as Kenya Gazette Supplement No. 72 (Senate Bills No.16) and is intended to regulate private employment agencies and the recruitment of workers both within and outside Kenya. The primary objectives of this Bill are to promote safe, fair, ethical and orderly recruitment of workers, protect the rights of job seekers, enhance coordination of labor migration governance in Kenya, enhance transparency and flexibility in labor migration and promote overseas employment among other objectives.
Employer implications/action needed Once the Bill is passed private employment agencies will need to ensure they comply with the registration requirements and practices laid out in the Bill.
Employer risk An employer found to be in contravention of the provisions of the Bill, once implemented, will be liable to a general penalty in the form of a fine not exceeding KES 1,000,000/- or imprisonment not exceeding two years or both.
Regulation of private security employers
Impact date: Awaited. Public participation in these regulations has just concluded. The Draft Private Security (General) Regulations, 2025 have now been published and are currently undergoing public participation. The Draft Regulations aim to regulate the employment and training of private security personnel including requirements to vet individuals appointed as private security officers, requirements for mandatory training of private security officers and the equipment to be used by said personnel when under the employment of private security providers. The Draft Regulations will also regulate the mandatory training of the directors, partners, trustees, administrators and management staff of private security firms. The Regulations will further provide that the Authority shall have supervisory powers over security training and assessment of persons employed in the private security industry.
Employer implications/action needed Employers in the private security industry should start to consider processes for the mandatory training of workers, including demonstrating proof by way of testimonials of undergoing continuous professional development courses annually. Once the draft regulations have been gazetted, employers in this industry will also have to vet individuals before employing them and ensuring that they are provided with the required equipment.
Employer risk There is no immediate statutory penalty while the Regulations remain in draft form. However, once gazetted, non-compliance may expose private security providers to regulatory sanctions, licensing issues and employment-related claims, particularly in relation to vetting, training, continuous professional development and the provision of required equipment to private security officers.
Link (Link here)
Labor Relations (Amendment) (No. 3) Bill 2024
Impact date: Awaited. It is yet to be gazetted and enacted into law. It is currently awaiting Presidential assent. The Labor Relations (Amendment) (No. 3) Bill, 2024, has been introduced to the Senate and it aims to prohibit the deduction of agency fees from the wages of unionizable employees who are not members of a trade union but are covered by the union's collective bargaining agreement. This amendment aligns with constitutional principles of freedom of association and the right to fair labor practices. The Bill also seeks to ensure fair labor practices for all unionizable workers and promote good governance, integrity, transparency, and accountability within trade unions and employers' organizations. It also addresses issues related to the term of office for union officials and the requirements for registering a trade union.
Employer implications/action needed Employers will be required to stop deducting agency fees from non-union members covered by a union's collective bargaining agreement.
Employers will also be required to review existing collective bargaining agreements to ensure they comply with the new provisions regarding agency fees.
Employer risk Employers may be liable for unlawful deductions from employees' wages. Non-compliance could also lead to industrial action, such as strikes or work stoppages, which can disrupt business operations and employers may face penalties or fines imposed by labor regulatory authorities.
Link (Link here)
The Local Content Bill 2025
Impact date: Awaited. It is yet to be gazetted and enacted into law. The Bill was passed by the Senate with amendments and referred to the National Assembly for consideration. The Local Content Bill 2025 has been introduced to the Senate. The Bill seeks to mandate various minimum local content thresholds for foreign companies offering certain types of services. Under the Bill, foreign companies operating in Kenya will be required to ensure that at least 80% of their workforce including management, are Kenyan citizens. Affected foreign companies will also be required to comply with Article 41 of the Constitution on fair labor practices including the right to fair remuneration of workers.
Employer implications/action needed Foreign companies that are employers offering any of the listed services should adhere to the local content requirements in relation to their workforce, including management.
Employer risk Foreign companies that are employers risk a fine of not less than KES 100,000,000 and an imprisonment term of not less than one year for the chief executive officer of the company.
Link (Link here)
Increase in wages
Impact date: Awaited, pending confirmation of the applicable legal notices or wage orders. A proposed 12% increase in the general minimum wage and a 15% increase in the minimum wage for agricultural workers has been announced. However, the changes take effect only once the government formally publishes amended wage orders or legal notices, such as amendments to the Regulation of Wages (General) Order and the Regulation of Wages (Agricultural Industry) Order. Until this occurs, the existing minimum wage rates remain in force.
Employer implications/action needed Employers should monitor the publication of the relevant wage orders or legal notices and review their payroll systems and salary structures in readiness for implementation. HR teams should identify employees who are currently paid at or near the existing minimum wage levels and assess the potential impact of the announced increases.
Employer risk Once the revised wage orders are published, employers that fail to apply the new minimum wage rates could face underpayment claims, back-pay liabilities and statutory penalties for non-compliance with Kenya's minimum wage requirements.
The Finance Bill 2026 – Mortgage interest relief
Impact date: The impact date is unknown. The Bill will be in force once it is passed by Parliament and gazetted. The Finance Bill 2026 proposes to extend Kenya's existing mortgage interest relief by allowing employed individuals to claim a tax deduction of up to KSh 360,000 per year for interest paid on qualifying housing loans provided by the Central Bank of Kenya (CBK) for the construction, purchase or improvement of a residential home. Currently, mortgage interest relief is generally limited to loans from qualifying institutions regulated under the Banking Act. The proposal would broaden the relief to include eligible CBK housing loans.
If enacted, the change could reduce the amount of income tax payable by employees who have qualifying CBK housing loans, increasing their take-home pay through the PAYE system. However, the proposal is not yet law and may be amended during the parliamentary process before being enacted. The new rules will only take effect if the Finance Bill 2026 is passed by Parliament and subsequently published in the Kenya Gazette.
Employer implications/action needed Employers should monitor the progress of the Finance Bill and, if the proposal is enacted, update payroll processes to accommodate mortgage interest relief claims relating to qualifying CBK loans. HR and payroll teams may also need to communicate the new eligibility requirements to affected employees.
Employer risk Once enacted, employers that fail to update PAYE processes may face payroll and tax compliance risks, including incorrect tax deductions for eligible employees.
Link Finance Bill 2026
The Finance Bill 2026 – Tax exemption on pension-related benefits to beneficiaries
Impact date: Awaited. The Finance Bill 2026 proposes to extend Kenya's existing tax exemption for pension payments so that it also clearly applies to death benefits paid to beneficiaries or dependents following the death of a member of a registered pension fund, provident fund, individual retirement fund, public pension scheme or the National Social Security Fund (NSSF). The proposal is intended to remove uncertainty about the tax treatment of such payments and ensure that eligible beneficiaries can receive these benefits without income tax being deducted.
The proposal is not yet law and may be amended during the parliamentary process. It will only take effect if the Finance Bill 2026 is passed by Parliament and subsequently gazetted.
Employer implications/action needed If enacted, employers and pension scheme administrators should review their payroll, tax and pension administration procedures to ensure that eligible death benefits are treated in accordance with the new exemption. Employee communications and pension-related guidance may also need to be updated.
Employer risk Once in force, incorrect taxation of death benefits could lead to compliance issues, employee complaints and potential assessments or penalties from the Kenya Revenue Authority during audits or reviews.
Link Finance Bill 2026
The Finance Bill 2026 – Tax exemption for employer gratuity contributions
Impact date: Awaited. The Finance Bill 2026 proposes to exempt certain employer gratuity contributions from income tax. Under the proposal, contributions made by an employer towards an employee's gratuity entitlement would no longer be treated as taxable income where specific conditions are met. This would be a significant change, as such contributions are currently generally subject to income tax treatment.
The proposed exemption would apply only where the gratuity relates to a contract of service lasting at least three continuous years, the employer's total contributions do not exceed 31% of the employee's basic salary, and the employee is not already claiming tax-relieved contributions to a registered pension or provident fund under section 22A of the Income Tax Act. The aim is to encourage long-term employee savings while preventing employees from benefiting from multiple overlapping tax reliefs under different retirement arrangements
Employer implications/action needed If enacted, employers should review gratuity arrangements, payroll processes and HR policies to ensure that they satisfy the proposed conditions for the exemption, particularly the three-year service requirement, the 31% contribution limit and the restrictions relating to employees who participate in pension or provident funds.
Employer risk Once in force, incorrect PAYE treatment of gratuity contributions could expose employers to tax liabilities, penalties, interest and compliance issues during Kenya Revenue Authority audits.
Link Finance Bill 2026
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