Employer of Record Kenya - Hire Without Kenyan Entity

What Is an Employer of Record (EOR)?

An Employer of Record is a third-party service provider acting as your workforce’s legal employer. While your company retains full control over daily tasks and work assignments, the EOR handles essential employment functions.

Key Responsibilities of a Kenya Employer of Record

The EOR is responsible for:

• Employment contracts: Drafting and managing legally compliant employment contracts in line with Kenyan labor laws.
• Payroll and statutory benefits: Processing payroll in Kenya, including salaries, benefits, PAYE, NSSF, SHA, and other statutory deductions.
• Tax compliance: Filing tax returns and ensuring adherence to Kenyan tax laws and regulations.
• Employment compliance: Ensuring full compliance with Kenyan employment, labour, and workplace regulations.
• HR administration: Managing employee onboarding, records, and offboarding, while you oversee day-to-day work and performance.
• Legal employment liability: Acting as the legal employer in Kenya and assuming responsibility for employment-related risks.

Scale your team in Kenya with confidence using Afrisetup’s EOR services. We take on the legal employer responsibilities, ensuring full compliance, local representation, and risk protection—so you can focus on growing your business. From compliant employment management to global mobility support, Afrisetup is your trusted partner for hiring and managing talent in Kenya, the smart way.

Employment Laws in Kenya

Employment relationships in Kenya are regulated by a comprehensive legal system that balances the interests of employers and employees. At the core of this system is the Employment Act, 2007, which sets out the key rules on employee rights, employer responsibilities, and minimum standards for lawful employment.

Failure to comply with these laws can result in severe consequences for employers. Below are the essential regulations employers must follow:

1. Employment Contract in Kenya

In Kenya, employment contracts may be oral or written, but a written contract is required for jobs lasting more than three months or for work that cannot be completed within that time.

A compliant contract of employment in Kenya must clearly outline:
• Employee and employer details
• Job title, description, and place of work
• Contract start date, type, and duration
• Working hours and salary (rate of pay, calculation, and payment frequency)
• Date continuous service begins, including prior relevant employment
• Additional benefits
• Any other legally required information

The valid contract protects both the employer and the employee and must contain the key terms of employment as required by the Employment Act. They must also be understandable to employees who are illiterate or do not speak English, so they can fully grasp the terms before signing. Employers must issue the contract within two months of the start of employment, and failure to do so is an offense.

Types of Employment Contracts in Kenya

1. Permanent (Indefinite) contracts: Long-term agreements with no fixed end date, offering full employee rights and requiring lawful termination.
2. Fixed-term contracts: Have a set start and end date, ideal for projects, and can become permanent if renewed repeatedly.
3. Casual employment: Is short-term, paid daily, and usually for seasonal or occasional work, but may convert to permanent if continuous.
4. Probationary contracts: Are temporary periods to assess new hires, lasting up to six or twelve months with limited rights.
5. Piece-rate contracts: Pay employees based on output rather than hours worked, common in agriculture and manufacturing.
6. Seasonal contracts: Are tied to specific periods, like harvest or tourism seasons, with benefits accruing proportionally.
7. Apprenticeship and internship contracts: Are for training or skill development, may be paid or unpaid, and must follow legal registration and safety requirements.

An EOR Kenya ensures the correct contract type is used based on your hiring needs.

Mandatory Employee Benefits in Kenya

Employee benefits in Kenya play a crucial role in supporting workers’ financial security, health, and overall well-being. Beyond basic salaries, these benefits include statutory contributions, insurance coverage, retirement plans, and other perks that improve job satisfaction and work-life balance, helping employers attract and retain top talent. The key benefits are outlined below:

2. Leave Days in Kenya

Employees in Kenya are entitled to five types of leaves under the Kenyan law:
• Annual Leave: Employees receive 21 days of paid annual leave after completing one year of service. Leave accrues at 1.75 days per month over 12 months.
• Sick Leave: Employees qualify for seven days of full-pay sick leave after two months of continuous service. An additional seven days at half-pay is available within a year.
• Maternity Leave: Female employees are entitled to three months of fully paid maternity leave. They must notify their employer in advance.
• Paternity Leave: Male employees receive two weeks of fully paid paternity leave.
• Pre-adoptive Leave: The government of Kenya amended the Employment Act in 2021 to establish a pre-adoptive leave entitlement. This leave ensures that employees planning to adopt can spend quality time with their adopted children.

Other leaves not mentioned in the Employment Act:

• Compassionate Leave: Employers may grant leave for personal emergencies, such as a family member’s death or illness. The duration depends on company policy.
• Leave of Absence: Employees may take unpaid leave for personal matters at the employer’s discretion.
• Compulsory Leave: This leave usually comes before an investigation into an employee’s misconduct and is often followed by disciplinary actions. The length of the leave will depend on your company’s policies.

3. Working Hours in Kenya

• Standard Working Hours
The law limits the total working hours in Kenya to 52 hours per week. For a six-day workweek, this usually means 8 hours per day. For a five-day workweek, it can be up to 9 hours per day.

Employees working at night may work up to 60 hours per week. Work beyond these hours is considered overtime. Most employees get at least one rest day per week, and the workweek structure should be clearly defined in employment contracts.

• Overtime Eligibility
Overtime should generally be voluntary, except where specified in contracts. Most employees in non-managerial roles are entitled to overtime pay. Managers, executives, and supervisors typically do not qualify. Contractual or freelance workers may have different arrangements but must comply with legal minimums.

Overtime Calculation in Kenya

Overtime pay in Kenya depends on the type of employment and the day worked:
1. Hourly employees: Paid 1.5 times their regular hourly rate for each overtime hour on normal weekdays.
2. Salaried employees: Weekly salary ÷ 45 = hourly rate; overtime = 1.5 × hourly rate per extra hour on weekdays.
3. Piecework employees: Average hourly production rate = total weekly earnings ÷ total weekly hours; overtime = 1.5 × average hourly rate per extra hour.
4. Commission-based employees: Base hourly rate × 1.5 for hours worked beyond the standard workweek.
5. Work on rest days (e.g., Sunday): Overtime must be paid at 2 × the normal rate.
6. Work on public holidays: Overtime must also be paid at 2 × the normal rate.

Employers may agree to higher rates than the legal minimum.

• Paid Public Holidays in Kenya
If a public holiday falls on a Sunday, it is generally observed on Monday. The official 13 paid public holidays include the following and any other day gazetted by the government occasionally as a public holiday:

Public Holidays in Kenya