NAIROBI, Kenya, June 18 – The Law Society of Kenya (LSK) has warned employers that they could face legal consequences if they continue deducting enhanced National Social Security Fund (NSSF) contributions from workers despite ongoing court disputes over the legality of the rates.
LSK President Charles Kanjama said there is currently no court order staying the judgment that declared parts of the NSSF Act, 2013 unconstitutional, and advised employers to revert to the previous contribution regime.
“Pending determination of the substantive appeal, employers must immediately cease all deductions under the NSSF Act, 2013 and revert to the contribution regime that existed prior to its implementation,” Kanjama said.
The legality of the NSSF Act, 2013 has been contested in court since 2014. In Nairobi ELRC Petition No. 38 of 2014, the Employment and Labour Relations Court (ELRC) declared several provisions of the law unconstitutional.
Although the Court of Appeal (CoA) overturned that decision in February 2023 on jurisdictional grounds, the Supreme Court of Kenya later ruled in February 2024 that the ELRC had jurisdiction to hear the matter and sent the case back to the CoA for determination on its merits.
According to LSK, the Supreme Court decision effectively nullified the CoA judgment, restoring the legal effect of the ELRC ruling until the substantive appeal is determined.
The lawyers’ body issued the advisory after the Central Organization of Trade Unions (COTU) and the Federation of Kenya Employers (FKE) urged employers to continue remitting enhanced NSSF contributions to avoid penalties from the fund.
Under the enhanced contribution structure, employees contribute six percent of their pensionable earnings, with employers matching the amount.
LSK, however, cautioned that employers who continue implementing the higher deductions could expose themselves to legal challenges.
“The Society shall closely monitor compliance and consider all lawful measures available, including instituting contempt of court proceedings against persons found guilty of deliberate disobedience,” Kanjama said.
He added that individuals found in contempt could face sanctions, including fines, sequestration of assets, or imprisonment.
The latest advisory adds to growing uncertainty over NSSF deductions, with employers, workers and labour groups awaiting further clarification from the courts on the status of the contested law.
