Kenyan families face fines over maids’ NHIF pay

You have 30 days to start remitting National Hospital Insurance Fund deductions for your househelp or risk incurring a monthly penalty equal to five times the contribution. 

In a notice published on Wednesday, NHIF is offering a 30-day amnesty for those yet to comply with the June legal guidelines governing employment of domestic workers published by the Ministry of Labour. 

The rules offered domestic workers a legal framework to demand minimum wages, employment contracts, deductions for pensions and medical care, among other work benefits.

“The notice mostly targets small employers with a workforce of less than five as they constitute the majority of employers who have not yet declared their employees,” said Mr Richard Sigei, manager micro-insurance and sponsored programmes at the hospital fund while hinting that most of these employers are those in the domestic services category.

Hospital fund members contribute Sh320 a month.

The NHIF Act provides that employers are penalised five times the amount of monthly contribution to the fund for every non-member employee on their payroll.

Healthcare costs

The hospital fund compensates its members for healthcare costs incurred for in-patient services.

Last year, attempts by Medical Services Minister Anyang’ Nyong’o to broaden its mandate to include out-patient services that would increase contributions were rejected by workers’ organisations.

In June this year, guidelines governing employment of domestic workers were published by the Minister of Labour following the passage of new rules by the International Labour Organisation, of which Kenya is a member.

The guidelines were, however, opposed by employers who feared incurring extra staff costs resulting from higher salary demands to accommodate the increased pay to domestic workers.

At the time, the Kenya Union of Domestic, Hotels, Educational Institutions, Hospitals and Allied Workers, an umbrella body that covers domestic workers, welcomed the guidelines.

However, in a new twist of events, the union has opposed the move by the hospital fund signalling a possibility of war between the pair.

“It is a tough call because it has not even consulted stakeholders before this decision was made,” said Mr Colonel Oundah, senior deputy secretary-general of the union.

Under the NHIF Act, employers of domestic workers are required to deduct the contribution to the fund from the workers’ salaries before paying their salary.

This is a move domestic and hotel workers union objects because it has come before the lapse of the 12 months after which the new employment guidelines for domestic workers would have taken effect and seen revision of salaries for workers to “comfortably” accommodate contributions to the fund.

“It is not a choice. The law requires employers to deduct money from employees’ salaries and remit to the fund,” Mr Sigei said.

Pubs Entertainment & Restaurants Association of Kenya, an association of pubs and restaurant owners, has welcomed the move by hospital fund citing the need to cater for healthcare needs of workers in the hospitality and entertainment sectors.

“Majority of our members have been contributing to the health fund on behalf of their employees. However, the action is welcome to address the needs of those who are not catered for in the scheme,” said Mr Sam Ikwaye, chief executive of the pub owners association.

Although the fund has pursued the judicial process in the past while dealing with such employers, its efforts have not yielded much in terms of having employers fined by courts as often bosses rush to comply with the law ahead of charges.

By last year, hospital fund had signed up 60,000 employers.

Today this has risen to 72,089. The scheme also covers about 900,000 Kenyans working in the informal sector.

The latest move adds weight to a law introduced earlier that seeks to protect the rights of domestic staff.

A review by financial consultancy services firm Deloitte released two months ago, however, recommends that national hospital insurance fund increase its rates to address long-term financial sustainability that ensure sufficient revenue.