The National Assembly has directed Treasury Cabinet Secretary John Mbadi to team up with Attorney General Dorcas Oduor to consider revising or even scrapping the one-third salary rule. This step is driven by the growing frustration among civil servants, who are seeing their take-home pay shrink due to increasing deductions.
The Public Accounts Committee (PAC) recently held a meeting to dig into why these deductions are eating away at the earnings of many Kenyans. They aim to fulfill their oversight role by calling on CS Mbadi to shed light on why so many public employees are left with so little disposable income.
Right now, it’s common for workers to allocate more than two-thirds of their basic salaries to loans and mandatory contributions, which is above the legal limit.
The PAC has pointed fingers at the new deductions introduced under President William Ruto’s administration. These include the Affordable Housing Levy, the Social Health Authority contribution, and increased National Social Security Fund (NSSF) contributions. Together, these deductions have made it tough to stick to the one-third salary rule.
There’s also a growing worry about government departments not sticking to the Employment Act, 2007. The law is clear: employers can’t deduct more than two-thirds of an employee’s basic salary.
Yet, with rising statutory and tax deductions, this rule is becoming harder to uphold. Civil servants are seeing more and more deductions on their payslips, including 1.5% of gross pay for the Housing Levy, 2.75% for the Social Health Insurance Fund (SHIF), and higher NSSF contributions. It’s no wonder workers in various sectors are feeling the financial squeeze.
Lugari MP Nabii Nabwera has warned that if this issue isn’t tackled, it’ll keep popping up in future audit reports. The committee has urged the National Treasury to work closely with the Attorney General to find a legal and sustainable solution.
Without action, this problem is likely to remain a recurring audit concern.
Lawmakers have voiced a shared belief that civil servants shouldn’t bear the brunt of policies they didn’t create. They pointed out that Parliament itself approved the taxes causing the current financial strain on public employees.
In June 2023, 4,082 government workers were earning less than one-third of their basic salary according to the Integrated Personnel and Payroll Database (IPPD). That number is believed to have gone considerably up following the new deductions.
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