NAIROBI, Kenya, Mar 27 – Members of Parliament are considering amending the Employment Act, 2007 to remove the one-third salary rule, citing the impact of increased tax deductions under President William Ruto’s administration.
The National Assembly Public Accounts Committee (PAC), chaired by Butere MP Tindi Mwale, has raised concerns over the rule, noting that several state departments have already breached the requirement, making its enforcement impractical.
Over the past two years, Parliament has passed a series of new mandatory taxes, leaving many employees grappling with shrinking pay slips.
A report from the Auditor General for the 2023/2024 financial year revealed that twenty employees in the State Department for Irrigation were receiving a net pay below the legally required one-third of their basic salary.
Appearing before the committee, Irrigation Principal Secretary Ephantus Kamotho acknowledged the issue, attributing it to the recent tax measures.
“The necessary actions have been taken, and the affected officers have been informed and directed to comply within 14 days, failure to which disciplinary action will be taken against them,” Kamotho stated.
The financial strain has been exacerbated by deductions such as the 1.5 percent Housing Levy and the 2.75 percent mandatory Social Health Insurance Fund (SHIF), which have significantly reduced employees’ disposable income.
Due to the scenario, many workers now find themselves precariously close to or falling below the one-third basic pay threshold, raising concerns over financial sustainability.
Members of Parliament sitting in an oversight committee are calling on the National Treasury to consult the Attorney General’s office on how to address the growing concern of civil servants taking home less than the legally mandated one-third of their salary.
This follows concerns raised in auditor reports, which revealed that a significant number of government employees are now earning below the threshold due to increased statutory deductions.
Lugari MP Nabii Nabwera questioned the feasibility of the law under the current economic conditions, pointing out that new taxes introduced by Parliament in sectors such as housing, social health insurance (SHA), and the National Social Security Fund (NSSF) have left public servants, including MPs, financially strained.
“We had asked the Treasury to guide us following the introduction of taxes on NSSF, SHA, and the housing sector. Many public servants had already committed their salaries. Is this rule still tenable? We requested the Treasury to consult the Attorney General on how to navigate this issue given the current financial realities,” said Nabwera.
Funyula MP Wilberforce Oundo strongly criticized disciplinary measures issued to staff within the State Department for Irrigation, calling them unfair and insensitive.
“I urge you to withdraw this memo to staff, it is inhumane, unfair, and completely unreasonable. These employees did not impose the housing levy, higher SHA and NSSF rates, or the high cost of living that has forced them into expensive loans,” stated Oundo.
He further questioned the logic behind penalizing employees who are already struggling under financial constraints.
“What kind of disciplinary action do you intend to take? Fire them? Do you expect them to sell their properties just to offset loans and bring their salaries into compliance? This is simply unfair and inhumane,” he said.
