The Federation of Kenya Employers (FKE) has warned the government against implementing a proposed 7 per cent wage increment for salaried workers, cautioning that this could strain businesses already struggling with the current economic situation.
FKE Chief Executive Officer Jacqueline Mugo on Friday, April 24, said many businesses continue to face mounting pressures, including high taxes and, in some cases, restructuring and closures.
Speaking at the Rift Valley branch’s 37th annual general meeting, Mugo noted that the situation has created a difficult environment for small and medium-sized enterprises (SMEs).
“As a federation of Kenyan employers, we are aware that the last review for minimum wage increases was done two years ago,” Mugo stated.
“But we are also aware that businesses are struggling, and we will be appealing to the government to balance the interests of businesses and the interests of employees.”
Of particular concern to employers, according to Mugo, is the proposal to align the minimum terms and conditions of service in the agricultural sector with those set by the general wages council.
Mugo warned that such a move could significantly increase labour costs in a sector already facing several challenges, urging President William Ruto’s administration to reconsider its planned decision.
During the meeting, the employers’ federation also raised concerns about delayed Value Added Tax (VAT) refunds, which are especially affecting agribusinesses.
Despite legal provisions requiring refunds to be processed within 90 days, FKE said many businesses continue to experience prolonged delays that tie up critical working capital.
FKE is now calling on the Kenya Revenue Authority (KRA) to hasten the verification process and ensure the timely settlement of legitimate claims to support business cash flow and stability.
“Refunds should be processed within 90 days, but this is not happening fast enough. So we are appealing to KRA to refund in time and also expedite the verification process and settle legitimate claims on time,” Mugo stated.
Meanwhile, FKE’s plea follows the Central Organisation of Trade Unions’ (COTU) call for an increase in the employees’ minimum wages, with President Ruto expected to issue a directive on the matter during the May 1, 2026, Labour Day celebrations-Kenyans.co.ke.
