City lawyer John Maina Ndegwa has recently lodged a legal challenge at the Milimani Law Courts against the impending National Social Security Fund (NSSF) deductions set to be enforced next month. Maina argues that the anticipated economic repercussions of this implementation will detrimentally affect Kenya’s economy, potentially leading to increased employee layoffs as employers grapple with raised operational costs.
In the filed petition, the lawyer contends that the proposed deductions coincide with a period when Kenyans are already burdened by the escalating cost of living, causing their income to dwindle amid an economically challenging climate. He emphasizes the need for urgent court intervention, seeking a temporary order to restrain the NSSF board from executing the revised contribution rates slated for 2024.
Referring to the NSSF Act 2013, Maina highlights the board’s failure to provide clear guidance to employers on the implementation of the stipulated contribution amounts within the first four years of the Act’s commencement in 2014. This lack of guidance, according to court documents, has resulted in confusion and anxiety within both the public and private sectors of Kenya’s economy.
The lawyer specifically points to the amendments in the new rates, such as the raised lower earnings limit to Ksh.7,000 from Ksh.6,000. Consequently, employees falling within this category will see their contributions increase from Ksh.360 to Ksh.420. Additionally, the Upper Earnings Limit has surged to Ksh.29,000 from Ksh.18,000, translating to a higher employee contribution of Ksh.1,740 compared to the previous Ksh.1,080. Notably, each contribution will continue to be matched by the employer, as per the existing practice.
Maina contends that the current rates, effective until the next review in January 2025, were introduced last year and are designed to incrementally rise over a five-year period. The lawyer’s legal challenge underscores the need for clarity, guidance, and a fair consideration of the economic challenges faced by both employers and employees in Kenya.