Explainer: Why employers are raising red flags over Ruto’s 12% salary proposal
By Aloys Michael, May 4, 2026President William Ruto’s announcement of a 12 per cent wage increase for all workers during the Labour Day celebrations sparked immediate excitement among employees.
Many Kenyans expected the directive to translate into higher take-home pay as early as the end of April 2026.
However, employers and labour employers are now urging caution, warning that the proposal is neither immediate nor as straightforward as it may appear.
The President’s pronouncement, while politically significant, does not automatically carry the force of law. Under Kenya’s labour framework, wage adjustments must follow a structured process before they become enforceable.
This means the announcement currently serves as a policy signal rather than a binding directive.
For any wage increase to take effect, it must first be formalised through a legal instrument, typically a wage order, issued under the country’s labour laws.
Crucially, this order must be published in the Kenya Gazette. Without gazettement, the proposal remains non-binding, leaving employers with no legal obligation to adjust salaries.
Even after gazettement, the process does not end there. Employers, trade unions, and relevant government agencies must engage in consultations to determine how the increase will be applied.
These negotiations are critical in clarifying whether the 12 per cent adjustment will affect basic salaries, allowances, or a combination of both.
COTU faulted
It is within this grey area that tensions have begun to emerge. The Central Organisation of Trade Unions (COTU), led by Secretary General Francis Atwoli, has interpreted the President’s announcement as a general wage increase applicable to all workers across the board.
Atwoli has dismissed claims that the directive is limited to minimum wage earners, insisting it should benefit every employee regardless of their current pay level.
But employers, represented by the Federation of Kenya Employers (FKE), disagree.
The federation’s Chief Executive, Jacqueline Mugo, argues that such an interpretation is erroneous, unfounded and deliberately misleading, warning that it risks creating confusion and unnecessary tension in workplaces.
FKE maintains that Kenyan law only empowers the government to regulate minimum wages, not general wages for all employees.
According to the employers’ body, any government-directed adjustment can only apply to statutory minimum wages as outlined in the Regulation of Wages Orders.
“The law only grants power to regulate minimum wages, not general wages,” FKE stated, adding that wages above the minimum threshold are governed by employment contracts, collective bargaining agreements (CBAs), productivity, and broader market forces.
The legal quagmire
This distinction is critical. While minimum wage adjustments are legally binding once gazetted, salaries above that level fall under what is known as freedom of contract, which gives employers discretion to determine pay based on individual agreements with employees or unions.
FKE further emphasised the role of collective bargaining, noting that any wage increases beyond statutory minimums must be negotiated through established mechanisms under the Labour Relations Act.
This process often involves detailed discussions on affordability, sector performance, and economic conditions, factors that cannot be overridden by a general presidential announcement.
The employers’ body also cited provisions of the Labour Institutions Act and Labour Relations Act to argue that extending a blanket 12 per cent increase to all workers would have no legal basis under current laws.
For employees, this means the anticipated pay rise is likely to take longer and may not be uniformly applied.
Even if a wage order is eventually issued, its scope could be limited to minimum wage earners unless further agreements are reached at the sector or company level.
In practical terms, implementation will only occur after all procedural steps are completed: gazettement, stakeholder consultations, and eventual adjustments through payroll systems and revised contracts.
Until then, payslips will remain unchanged.