Building an HR policy set for a growing team

In a small business, the HR rules usually live in the founder's head. That stops working when managers start hiring on their own, a second site opens and the first dispute arrives. Then the business needs written policies that everyone applies the same way.

Outsiders ask to see them too: labour officers, the Employment and Labour Relations Court, lenders and larger clients. Here is the core set we build with growing employers in Kenya.

Contracts and written particulars

Start with the contract. The Employment Act, 2007 requires employment beyond short casual engagements to be in writing, and it lists the particulars every employee must receive. These include the job, the place of work, hours, pay and how often it is paid, leave entitlements, notice and the disciplinary rules that apply.

Use a standard template for each type of role: permanent, fixed-term, probationary and casual. Keep a signed copy of every contract and job description on file. Casual staff who work continuously can acquire the rights of regular employees under the Act, so track how long each one has worked.

Working hours and leave

A working-hours policy sets normal hours, rest days, shifts, overtime and how overtime is approved and paid. Minimum wages and, in many sectors, normal hours are set by wage orders made under the Labour Institutions Act, 2007, and are revised from time to time. Follow the order that applies to your sector and location.

The leave policy covers annual leave, sick leave, maternity and paternity leave, public holidays and any compassionate leave you choose to offer. Your policy can be more generous than the Act's minimum entitlements, never less. Spell out how leave is requested and approved, what evidence is needed for sick leave and what happens to leave not taken. The Act requires employers to keep records for each employee, so keep leave records accurate.

Discipline, grievance and harassment

A disciplinary procedure tells staff what counts as misconduct and what happens next. Set out the steps: investigation, written notice of the allegation, a hearing, a decision and an appeal. Before dismissing an employee for misconduct or poor performance, the Act requires the employer to explain the reason in a language the employee understands and to hear the employee's response, with a colleague or union representative present if the employee chooses. Skipping the procedure can make a dismissal unfair even when the reason was sound.

A grievance procedure gives staff a clear route to raise a complaint, with a named person, a timeline and a way to escalate.

The Act requires an employer with twenty or more employees to issue a sexual harassment policy statement, after consulting employees or their representatives. The statement must define sexual harassment as the Act does, commit to preventing it, explain how to complain, protect the complainant's confidentiality and set out the disciplinary consequences. It must be brought to the attention of everyone under the employer's direction. Smaller employers should adopt one anyway, before the team reaches the threshold.

Payroll and statutory deductions

Payroll is where small errors become expensive. Each month an employer deducts and remits several statutory amounts:

• PAYE income tax, deducted from pay and remitted to KRA.
• NSSF pension contributions, with an employee share and a matching employer share.
• The Social Health Insurance Fund contribution, administered by the Social Health Authority, which took over from NHIF.
• The Affordable Housing Levy under the Affordable Housing Act, 2024, with employee and employer shares, collected by KRA.

Rates, caps and deadlines have changed several times in recent years, so don't fix them in the policy. Say who checks them, how often and against which official source. The policy should also cover itemised payslips, the limits the Act places on deductions from wages and who approves payroll before it is paid. Late remittances attract penalties and can hold up a tax compliance certificate from KRA.

Employee data and workplace safety

HR files hold some of the most sensitive data a business keeps: ID numbers, KRA PINs, bank details, medical notes and next-of-kin details. The Data Protection Act, 2019 requires you to have a lawful basis for processing it, collect only what you need, keep it secure, hold it no longer than necessary and respect employees' rights to access and correct their records. An employee data policy should say what you collect, who can see it, where it is stored, how long you keep it and what happens if it is lost or leaked. Check whether you must register with the Office of the Data Protection Commissioner, and sign a written agreement with any outside payroll or HR provider that handles the data.

The Occupational Safety and Health Act, 2007 requires every occupier to prepare a written safety and health policy, revise it as needed and bring it to the attention of employees. Around the policy sit the practical duties: registering the workplace with the Directorate of Occupational Safety and Health Services, assessing risks, providing first aid and, once a workplace has twenty or more employees, setting up a safety and health committee. Work-injury cover under the Work Injury Benefits Act, 2007 belongs in the same file.

Keeping the set current

A policy set filed away goes stale. Finance Acts change payroll rules, wage orders are revised and a growing business crosses headcount thresholds. Give each policy an owner and a review date, review the whole set at least once a year, and review it sooner when:

• a new law, regulation or wage order affects your sector;
• headcount crosses a threshold, such as the one for a sexual harassment policy or a safety and health committee;
• you open a new site, enter a new county or start a new type of work;
• a dispute, court decision or inspection shows a gap.

Date and number every version, ask staff to acknowledge it in writing and brief managers on what changed. A policy managers ignore can do more harm than none, because it shows the business knew the standard and didn't apply it.

How we help

Epiidosis Africa's HR, recruitment and workplace safety practice drafts or reviews your core policy set, aligns contracts and particulars to it, and sets up the disciplinary, grievance and harassment procedures. We train managers to apply them and run safety and first aid training for your teams. If you are preparing for finance, our finance practice checks that HR and payroll records support the pack. Our insurance and risk practice reviews work-injury and other employee cover, which is placed through licensed insurers and brokers.

This is general information, not legal advice. We review policies with counsel where the law is unsettled.