Employers Differ with President Kenyatta over 5% Minimum Wage Increase
The five percent increment in the minimum wage introduced by the president of Kenya, Uhuru Kenyatta has brought controversies as employers differs.
The average minimum wage for a worker in Kisumu, Mombasa and Nairobi is KSh 10,955.
The president increased minimum wage in May 2017 and 2018 but skipped two years without increasing the wage prior to 2017.
Uhuru directed Industrialisation CS to work with employers and reduce cost of production
Employers say the increase in labour cost will force them to retrench and close businesses.
The Federation of Kenya Employers (FKE) has opposed the directive by President Uhuru Kenyatta to increase the minimum wage by 5%.
Through a speech read by Labour Ministry Cabinet Secretary Ukur Yatani on Tuesday, May 1, Uhuru announced a 5% minimum wage increment to be effected immediately.
The FKE Chairperson Jacqueline Mugo, however sharply differed with the president saying the statement was made in a celebratory mood in line with May Day celebrations, but did not have the employers’ input.
“Setting and adjustment of the statutory minimum wage has been done without a clear policy and in total disregard of the provisions of the labour institutions laws,” read the statement signed by Mugo.
According to her, the president had increased the minimum wage in 2017 and was supposed to make another upward review after two years.
Given the government made a minimum wage adjustment in 2017, the employers didn’t expect further wage adjustment until 2019. We urge the government to adhere to wage setting guidelines to bring stability to the sector,” added Mugo.
She said increasing the cost of labour results to high operational costs and reduced revenue which will push many companies to relocate from Kenya or close shop.
“Many companies will be tempted to relocate to countries where labour costs are lower by more than half
“The government made a minimum wage adjustment in 2017, the employers didn’t expect further wage adjustment until 2019. We urge the government to adhere to wage setting guidelines to bring stability to the sector,” added Mugo.
She said increasing the cost of labour results to high operational costs and reduced revenue which will push many companies to relocate from Kenya or close shop.
“Many companies will be tempted to relocate to countries where labour costs are lower by more than half that of Kenya,” said Mugo.
Central Organisation Trade Union (COTU) Secretary General Francis Atwoli had called for an increase in employees' salaries ahead of President Uhuru Kenyatta's announcement. Photo: Daily Nation.
The Federation pointed out countries like Egypt, Ethiopia, Uganda, Tanzania, Rwanda and Malawi are among those with favourable labour costs thus attracting many investors.
The employers said implementing the recent directive by the president will push up expenses for investors and force many companies to do more retrenchments due to loss of revenue.
The average minimum wage for a worker in Kisumu, Mombasa and Nairobi is KSh 10,955.
The president increased minimum wage in May 2017 and 2018 but skipped two years without increasing the wage prior to 2017.
Uhuru directed Industrialisation CS to work with employers and reduce cost of production
Employers say the increase in labour cost will force them to retrench and close businesses.
The Federation of Kenya Employers (FKE) has opposed the directive by President Uhuru Kenyatta to increase the minimum wage by 5%.
Through a speech read by Labour Ministry Cabinet Secretary Ukur Yatani on Tuesday, May 1, Uhuru announced a 5% minimum wage increment to be effected immediately.
The FKE Chairperson Jacqueline Mugo, however sharply differed with the president saying the statement was made in a celebratory mood in line with May Day celebrations, but did not have the employers’ input.
“Setting and adjustment of the statutory minimum wage has been done without a clear policy and in total disregard of the provisions of the labour institutions laws,” read the statement signed by Mugo.
According to her, the president had increased the minimum wage in 2017 and was supposed to make another upward review after two years.
Given the government made a minimum wage adjustment in 2017, the employers didn’t expect further wage adjustment until 2019. We urge the government to adhere to wage setting guidelines to bring stability to the sector,” added Mugo.
She said increasing the cost of labour results to high operational costs and reduced revenue which will push many companies to relocate from Kenya or close shop.
“Many companies will be tempted to relocate to countries where labour costs are lower by more than half
“The government made a minimum wage adjustment in 2017, the employers didn’t expect further wage adjustment until 2019. We urge the government to adhere to wage setting guidelines to bring stability to the sector,” added Mugo.
She said increasing the cost of labour results to high operational costs and reduced revenue which will push many companies to relocate from Kenya or close shop.
“Many companies will be tempted to relocate to countries where labour costs are lower by more than half that of Kenya,” said Mugo.
Central Organisation Trade Union (COTU) Secretary General Francis Atwoli had called for an increase in employees' salaries ahead of President Uhuru Kenyatta's announcement. Photo: Daily Nation.
The Federation pointed out countries like Egypt, Ethiopia, Uganda, Tanzania, Rwanda and Malawi are among those with favourable labour costs thus attracting many investors.
The employers said implementing the recent directive by the president will push up expenses for investors and force many companies to do more retrenchments due to loss of revenue.
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