Salary Increments and Presidential Directives.

Presidential directives on salary increments in Kenya typically focus on adjusting the minimum wage to cushion low-income workers against rising costs of living. These directives are legally enforceable under the Regulation of Wages and Conditions of Employment Act, which empowers the Minister of Labour to issue wage orders based on recommendations from tripartite Wages Councils (comprising government, employer, and worker representatives). Below are key examples of such directives during Labour Day:

2022: President Uhuru Kenyatta’s 12% Minimum Wage Increase

On May 1, 2022, during Labour Day celebrations at Nyayo National Stadium, President Uhuru Kenyatta announced a 12% increase in the minimum wage, effective immediately. This directive came after a three-year freeze on wage reviews, prompted by the economic fallout from the COVID-19 pandemic and global supply chain disruptions, including the Russia-Ukraine conflict, which drove up fuel and commodity prices. The minimum wage for general labourers in major cities like Nairobi, Mombasa, and Kisumu rose from KSh 13,572.90 to KSh 15,201.64. Specific increments included:

• Cashiers: KSh 30,627.45 to KSh 34,302.74
• Night security guards: KSh 15,141.95 to KSh 16,958.98
• Heavy commercial vehicle drivers: KSh 30,627.45 to KSh 34,302.74

Context: COTU had initially proposed a 24% increase, later revised to 23.4%, citing inflation rates of 6.47% and eroded purchasing power. The FKE opposed the hike, arguing that businesses were still recovering from COVID-19 losses and high operational costs. Despite resistance, Kenyatta justified the increment as a necessary measure to protect workers from economic hardship, emphasizing government subsidies on fuel and tax reliefs like reduced PAYE and VAT.

Impact:

• Positive: The increment benefited low-cadre workers, such as cleaners, house helps, and drivers, enhancing their purchasing power. It was celebrated as a gesture of appreciation for workers’ resilience during the pandemic.
• Challenges: Employers, particularly in the private sector, faced increased payroll costs, with some warning of potential layoffs to maintain profitability. The directive also sparked debates about its sustainability, as it strained government and private sector budgets without addressing underlying productivity issues.

2024: President William Ruto’s 6% Minimum Wage Increase

On May 1, 2024, during the 59th Labour Day celebrations at Uhuru Gardens, President William Ruto directed the Ministry of Labour to work with relevant committees to implement a minimum wage increase of at least 6%. This followed consultations with Wages Councils, with COTU proposing a 26.3% hike and the government suggesting 15% to offset inflation. Ruto emphasized economic stabilization measures, including managing inflation and lowering prices of basic goods, as complementary to the wage increase.

Context: The directive responded to rising living costs and statutory deductions that had eroded workers’ purchasing power. However, implementation faced resistance, with some employers, backed by FKE, citing economic constraints. By 2025, COTU Secretary-General Francis Atwoli raised concerns about non-compliance, prompting Ruto to reiterate the directive during the 60th Labour Day celebrations, ordering the Ministry of Labour to enforce the 6% increment.

Impact:

• Positive: The increment aimed to provide relief to workers, particularly in the context of economic reforms like the 2025 Finance Bill, which introduced tax reliefs to boost take-home pay. It aligned with the theme “Self-Reliance in Production,” encouraging productivity-driven growth.
• Challenges: Non-compliance by some employers highlighted enforcement gaps. The modest 6% increase fell short of COTU’s expectations, leading to calls for higher increments to match inflation and living costs.

2025: Enforcement and Broader Reforms

During the 60th Labour Day celebrations on May 1, 2025, President Ruto addressed ongoing concerns about the 2024 directive’s implementation. He directed employers to comply with the 6% minimum wage increase, with the Ministry of Labour tasked to conduct nationwide inspections to ensure adherence. Additionally, Ruto announced reforms in the 2025 Finance Bill, including tax exemptions for pensioners and direct application of PAYE reliefs to boost workers’ net pay. These measures aimed to enhance workers’ financial security and retirement dignity.

Economic and Social Implications

Presidential directives on salary increments during Labour Day have significant implications:

1. Economic Stimulus: Increased wages boost consumer spending, supporting local businesses and economic growth. For instance, the 2022 increment was estimated to add billions to workers’ disposable income.
2. Inflationary Pressure: Rapid wage hikes can fuel inflation, especially if not matched by productivity gains. In 2022, concerns were raised that the 12% increase could exacerbate price surges in an already strained economy.
3. Public vs. Private Sector Disparity: While public sector workers often benefit promptly from directives, private sector implementation varies, creating inequities. Non-unionized workers, like house helps, may miss out due to weak enforcement.
4. Political Dynamics: Labour Day announcements are often politically motivated, especially in election years. The 2017 18% increment, announced before the presidential poll, was seen as a vote-winning strategy.
5. Enforcement Challenges: Directives face hurdles due to bureaucratic delays, employer resistance, and limited labour inspection capacity. In 2025, the Ministry of Labour’s planned inspections aimed to address this.

Challenges of Presidential Directives

1. Sustainability: Funding wage increments strains national budgets, often requiring trade-offs, such as reduced infrastructure spending or increased borrowing.
2. Employer Resistance: The FKE has consistently opposed large increments, citing high operational costs and depressed earnings, as seen in 2022 and 2024.
3. Inequitable Benefits: Increments often prioritize minimum wage earners, leaving mid- and high-level workers reliant on collective bargaining agreements (CBAs), which may not align with presidential directives.
4. Global Economic Pressures: External factors, like fuel price surges and geopolitical conflicts, limit the government’s ability to implement large increments without risking fiscal instability.

Recommendations for Effective Directives

1. Data-Driven Decisions: Base increments on comprehensive economic analyses, considering inflation, productivity, and fiscal capacity. The 2024 Wages Council consultations were a step in this direction.
2. Tripartite Consensus: Engage COTU, FKE, and government stakeholders to balance worker needs with employer capabilities, reducing resistance and ensuring compliance.
3. Enforcement Mechanisms: Strengthen labour inspections and impose penalties for non-compliance, as directed in 2025.
4. Complementary Policies: Pair wage increments with productivity reforms, tax reliefs, and subsidies to mitigate inflationary risks and enhance worker welfare, as seen in the 2025 Finance Bill.
5. Long-Term Wage Policy: Move away from ad-hoc Labour Day announcements toward a predictable wage review cycle, aligned with ILO Convention 131, to ensure stability and fairness.

Conclusion

Presidential directives on salary increments during Labour Day in Kenya are a critical tool for addressing workers’ economic challenges and reinforcing the government’s commitment to labour welfare. The 12% increment in 2022 and the 6% increment in 2024, along with enforcement efforts in 2025, highlight the government’s responsiveness to rising living costs and union demands. However, these directives must navigate economic constraints, employer resistance, and enforcement gaps to deliver lasting benefits. By fostering tripartite dialogue, grounding decisions in data, and integrating broader economic reforms, Kenya can ensure that Labour Day announcements translate into meaningful improvements for all workers.