Kenyan employees are set for another salary cut towards an unemployment insurance as a safety net, in case of job loses should a proposed Bill sails through.

The proposed Unemployment Insurance Bill 2022 in Kenya seeks to establish an Unemployment Insurance Fund that would require contributions from both employers and employees, similar to the model in South Africa.

It aims to provide a financial safety net for employees who become unemployed, offering them a cushion during challenging times. The contributions are set at 1 percent of an employee’s pay, matched by an equal 1 percent contribution from the employer.

Sponsored by Ikolomani MP Bernard Shinali, it proposes the establishment of an Unemployment Insurance Authority that shall establish an Unemployment Insurance Fund that would require contributions from both employers and employees, drawing inspiration from South Africa’s  model.

Unemployment Insurance Fund

“Objective of the legislative bill is to provide the payment of the unemployment benefits to employees who become unemployed,” reads the proposed bill.

Under the bill’s provisions, employees and employers will be required to make contributions to the Unemployment Insurance Fund. The contributions are pegged at 1 per cent of an employee’s pay, to be matched by an equal 1 per cent contribution from the employer.

“By all means. Because our salaries are like an eternal bank account, just waiting to be tapped into whenever the government needs it for their latest recipe,” said @Kevman on Twitter.

This approach mirrors South Africa’s system, which has been lauded for providing a reliable safety net for workers facing unemployment.

Shinali, the bill’s sponsor, highlights the importance of such a system in today’s ever-changing job market. He notes that job security has become increasingly elusive, with many individuals facing the uncertainty of losing their livelihoods.

The Unemployment Insurance Bill 2022 aims to alleviate this insecurity and provide a sense of financial stability during periods of job loss.