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What is an employer of record?
Simply put, an employer of record is a company that takes responsibility for the financial and legal procedures needed to create and run an office abroad. An Employer of Record (EOR) firm handles payroll, the administration of employee benefits, as well as tax documentation.
When it comes to project-related work, the EOR company doesn’t intervene in workflows, offering business owners full management freedom.
Today, employers are beginning to recognize the importance of a sustainable and efficient approach to employee management in order to ensure that the best people are recruited and retained. As such, many Kenyan businesses are turning to Employer of Record Services in Kenya (EOR). This service provides a streamlined way of managing payroll, taxes, employee compliance and administration while providing access to legal and regulatory advice. This article will explore the importance of having an EOR service in Kenya and how it can be used to help facilitate rapid growth, mitigate risk and increase employee visibility.
Redefining Employee Management Through Employer of Record Services
Employer of Record Services is an expanding resource being utilized by Kenyan businesses to redefine employee management. When implemented accurately, EOR services can provide an easier way to handle payroll, ensure compliance is met and manage employee paperwork from a remote location. Using this service allows Kenyan businesses to focus on their core business objectives rather than the tedious task of managing employee resources. It also provides up-to-date information about the latest rules and regulations regarding employee management and helps ensure employers are not at risk of breaking any laws.
Making Employer of Record Services Accessible in Kenya
The use of EOR services in Kenya is on the rise, with more and more employers turning to this service as a reliable, cost-effective solution. As it can be conducted remotely, there are fewer costs associated with setting up and managing an in-house team to handle human resources. This has enabled more Kenyan businesses to access important employment processes and make the most of the resources accessible to them.
Enhancing Employer-Employee Relationships in Kenya Through Employer of Record Services
Employer of Record Services can help improve the employer-employee relationship in Kenya by providing efficient and accurate employee management processes. It allows employers to access employee information confidently, making it easier to provide feedback and direction. It also ensures compliance to applicable employee-related laws, preventing potential legal issues that could arise. This will help to foster a better understanding and relationship between both parties, helping to ensure that everyone is on the same page with regard to expectations.
Striking a Balance: Employer of Record Services in Kenya
Employer of Record Services in Kenya can help to create a balance between employer needs and employee rights. Employers can access accurate, up-to-date information regarding their employees and the applicable laws governing employee management. At the same time, this service can help to ensure that employees’ rights are not infringed upon and that they are afforded an acceptable and equitable working environment.
Employment Contracts in Kenya
In Kenya, it is mandatory to have employment contracts for all foreign employees assigned jobs in Kenya.
In Kenya, the employment cover letter and contract must indicate the salary and other benefits in Kenyan shillings.
Immigration Employment Compliance
Immigration employment policies and guidelines are constantly changing in Kenya and indeed around the world and there is increased scrutiny and restrictions by the government in the issuance of work permits and Work visas.
The government while trying to attract direct foreign investments, must also safeguard the local Kenyan job market which indeed has highly qualified Kenyans and few job opportunities.
This makes immigration employment compliance a great challenge for foreign companies and organizations.
To avoid non-compliance with immigration employment laws, many foreign companies choose to use our EOR solutions for work permit applications in Kenya to process all work permits and visa requirements.
How it works
If a foreign company chooses to set up in Kenya, the first step is setting up a local company by registration. This of course is time-consuming and expensive to ensure compliance.
Alternatively, a foreign entity may set up a foreign subsidiary in Kenya to run the operations of the company.
For a new entry company seeking to test the waters, chase contracts, or simply do not need to set up an office in Kenya immediately, using our local Employer of Record service is a better alternative.
We can handle all aspects of payroll, employment, and immigration compliance requirements in Kenya. With flexible contracts.
What the employer of record does.
- • Makes arrangements for all visas and work permits for the employee.
- • Provides a registered entity for running a local, compliant employee in Kenya,
- • Meets local labor regulations pertaining to local employment.
- • Is an intermediary between the parent employer and local government regulations.
How much does an EOR in Kenya cost?
Our EOR costs vary depending on your company’s needs in Kenya.
- Flat rate one-off option.
- Percentage of the payroll.
- Fixed monthly charge option.
Some statutory employment regulations in Kenya.
While employing a foreign national in Kenya, it is important to consider the following statutory employment practices.
- Public Holidays
- Working Hours – The labour law requires one 24-hour rest period every seven days and a one hour break per six hours of work
- Vacation – Employees are generally entitled to 21 days of paid annual leave after one year of employment
- Sick Leave – In general, employees are entitled to Sick leave under article 30 of the Employment Act.
- The National Social Security Fund (NSSF) is a statutory savings scheme to provide for retirement. Both employers and employee’s contribute 5% (up to KSH 200) per month
- The National Hospital Insurance Fund (NHIF) rates for high-income earners in the formal sector will rise by over 500 percent, that is, from the old NHIF rates of KSH 320 to KSH 1,700
- Taxes – PAYE. The tax year is 1st January to 31st December
Some common benefits include
- • Pension plans
- • Life insurance
- • Health insurance
- • Car allowance
- • Mobile phone allowance
- • House Allowance
Employer of Record Services in Kenya has opened a world of possibilities for businesses looking to manage their employee resources more efficiently and effectively. It is an invaluable tool that can help to reduce time spent on mundane administrative tasks, ensure regulatory and legal compliance, and foster a more cohesive relationship between employers, and employees. Ultimately, it provides a foolproof solution for any business looking to stay ahead of the curve and remain competitive in an ever-changing business landscape.