Plenty of Kenyan businesses run on casual labour: construction, farms, warehouses, events, hotels in high season. The law allows it. What it doesn’t allow is calling someone a casual for two years. The Employment Act has a specific test for when casual work stops being casual, and most claims by casuals turn on that test.
Who is a casual
Section 2 of the Employment Act defines a casual employee as a person whose terms of engagement provide for payment at the end of each day and who is not engaged for longer than 24 hours at a time. Two consequences follow:
- wages are due at the end of each day (s.18(2)(a));
- either side can end the engagement at the close of any day without notice (s.35(1)(a)).
Paying weekly doesn’t stop someone being casual on its own, but it is one of the facts a court looks at. If you pay weekly or fortnightly, the contract and the pattern of work should still show a fresh daily engagement.
When a casual becomes a term employee
Section 37(1) deems a casual’s contract to be one where wages are paid monthly, with s.35(1)(c) applying to it, where the casual:
- works for a period, or a number of continuous working days, that adds up to at least one month; or
- does work that can’t reasonably be expected to be finished within three months or more.
Two details catch employers out. First, the one-month test is an aggregate: a worker brought back day after day with short gaps can reach it without ever working a full calendar month in one go. Second, s.37(2) says that a casual is treated as entitled to a paid rest day after six continuous working days, and that rest day and any public holiday count towards the continuous days. A six-day-a-week worker reaches the threshold sooner than a simple day count suggests.
Once converted, the worker is on a monthly contract, terminable on 28 days’ written notice. Under s.37(3), a converted worker who has worked continuously for two months or more from the start of the casual engagement gets the terms and conditions the Act gives other employees: annual leave, sick leave, notice and the rest. A casual can complain to a labour officer, and in a dispute the court can vary the casual’s terms and declare them consistent with the Act (s.37(4) and (5)). Claims for unpaid leave and notice usually follow.
The practical fix is to review casuals monthly. Anyone near the one-month aggregate, or doing work that obviously runs for months, should either get a written term contract or genuinely stop being engaged. Rotating the same people through gaps to reset the count tends to fail in court, because the test is the substance of the engagement.
Which deductions apply
| Deduction | Casuals | Note |
|---|---|---|
| PAYE | Regular casuals: yes | See below for one-off engagements |
| NSSF | Yes | 6% + 6%, Year 4 limits |
| SHIF | Yes | 2.75%, minimum KES 300 |
| Housing Levy | Yes | 1.5% + 1.5% |
| NITA | Yes | KES 50 per employee per month |
The NSSF, SHIF and Housing Levy laws don’t exclude casual workers, so we treat casuals like any other employee on the payroll.
PAYE has one wrinkle. KRA’s employer’s guide to PAYE says emoluments for PAYE don’t include earnings from “casual employment”, which it defines as an engagement with one employer for less than one month, paid by reference to that period or shorter intervals. The same guide says regular casuals, people employed casually but regularly, are not casual employees for this purpose. So a one-off three-day job may fall outside PAYE, but your regular weekly crew does not. If you rely on the one-off exclusion, keep the records that show it really was a single short engagement, and confirm the position with your tax adviser.
Paying daily or weekly
Every statutory figure is monthly: the PAYE bands, the KES 2,400 personal relief, the NSSF limits and the SHIF minimum. The P10 is a monthly return. So the cleanest approach, and the one most payrolls use, is to work the deductions on each casual’s total pay for the calendar month. If you pay weekly, either deduct on a cumulative basis each week or settle the month’s deductions in the last pay of the month.
Take a casual on KES 1,200 a day who works 22 days in a month, KES 26,400 in total:
| Item | KES |
|---|---|
| Gross for the month | 26,400.00 |
| NSSF | 1,584.00 |
| SHIF | 726.00 |
| Housing Levy | 396.00 |
| PAYE | 0.00 |
| Net for the month | 23,694.00 |
PAYE is nil because tax on the taxable pay of KES 23,694 is less than the personal relief. If you had computed each week’s pay as if it were a full month, you’d get different and wrong figures.
Check the daily rate against the minimum wage too. The wage orders set daily and hourly rates as well as monthly ones; see minimum wage and housing allowance.
Casuals are usually paid by M-Pesa. Get each worker’s number in writing and check the registered name on the payment result. See paying salaries by bank or M-Pesa.
Records to keep
Section 20 doesn’t require an itemised pay statement for casual employees, but give one anyway. It’s the cheapest evidence you’ll ever have of what was paid and deducted. Beyond that, keep:
- a daily muster roll: name, ID number, date, hours or days worked, rate and signature or thumbprint;
- the KRA PIN, NSSF number and phone number for each casual you pay regularly;
- payment records that tie each day’s or week’s pay to the muster roll;
- a running count of days engaged per person, which is what you’ll need for the s.37 test.
Section 74 lets an authorised officer inspect records covering the previous 36 months, so keep at least that much. A casual who claims conversion two years later will be relying on your records as much as theirs.
This guide is general information, not legal advice. If a casual worker has raised a conversion claim, take advice on the facts.
Check a casual’s month in the net pay calculator.