NAIROBI, Kenya, April 23 – The Federation of Kenya Employers (FKE) has proposed creation of a wage relief kitty, similar to funding unveiled in the United Kingdom and the United States, to ease the financial constraint experienced by employers in light of slowed economic activity owing to the coronavirus pandemic.
The federation has proposed a module that will see the national government cater for 50 per cent of employers’ wage bills.
In their submissions to the Senate Committee on COVID-19, FKE Executive Director Jacqueline Mugo Wednesday said the intervention will mitigate the impact of COVID-19 on businesses.
“We are looking at a robust social protection policy which would cover situations where people are forced out of work not because of their mistakes and the companies but because of factors beyond our control,” the FKE executive said.
“This is the same government that pays senior citizens in terms of social assistance so we can do it,” she noted.
Mugo said the social protection measure will be a direct relief to manage payroll budgets and protect workers’ incomes and avert job losses.
Nonetheless she noted that the proposal has been previously rejected by the government citing inability to galvanize and set up the funds and difficulty in identifying eligible firms.
“We have pushed for this before, but there is clear indication from Government that it is difficult due to lack of funds, taking time to set funds and they are saying its difficult to identify the firms.
“However, It would have to be a cross cutting offer made to companies, for instance If the Government is taking 50 percent of wage bills, you would know how many employees based on the audited financial statements submitted to KRA,” Mugo remarked.
Under United Kingdom’s relief package, the British Government has pledged to cover 80 percent of employers’ wage bills.
The federation had told the Senate team that employers will consider unpaid leave, pay cuts to protect jobs in wake virus disruption.