Federation of Kenya Employers Oppose New Housing Scheme

  • The Federation of Kenya Employers (FKE) has declared their opposition towards a proposed new housing scheme that will see them forced to contribute a percentage of all employees' salaries towards a new fund.

    Treasury Cabinet Secretary Henry Rotich, while presenting the 2018/19 budget last week, proposed amendments to section 31 of the Employment Act.

    Under the plan, employers will have to contribute 0.5 percent of an employee's gross monthly salary to the National Housing Development Fund while employees will also contribute 0.5 percent of their monthly gross earnings.

    Terming the proposal as unreasonable, FKE Executive Director Jacqueline Mugo lamented that it would hurt employees and possibly force employers to take drastic measures.

    "We find it difficult to support this proposal because we do not know the parameters and assessments that were done to arrive at the figure," she noted.

    [caption caption="Jacqueline Mugo"][/caption]

    Rotich had reiterated that the plan is meant to improve access to low-cost housing among Kenyans as part of President Uhuru Kenyatta's Big Four agenda.

    Mugo, however, questioned if there were any guarantees that contributors to the scheme would be allocated the houses.

    Rotich disclosed that the means of allocation had not been decided, with a first come first serve basis or a lottery system both mentioned as possible options.

    Mugo revealed that the Cabinet Secretary's proposal came as a surprise to employers.

    If successfully established, the National Housing Development Fund (NHDF) will become the third statutory fund after the National Health Insurance Fund (NHIF) and the National Social Security Fund (NSSF).

    [caption caption="Treasury CS Henry Rotich"][/caption]