In recent regulatory development, the Kenyan government has directed that all licensed private security officers be paid a minimum monthly gross salary of KES. 30,000. The Private Security Regulatory Authority (PSRA) Director, Fazul Mahaned, has directed that employers are required to comply with the directives, warning that any employer who fails to remunerate guards at the mandated basic minimum shall be liable to imprisonment or a fine of KES. 2 million, or both. In this instance, employers refer to any person, i.e., government institutions, security companies, corporate entities, organizations, and associations, that engage in the services of any private security provider. This salary increment serves to cater to the guards’ welfare amidst the harsh working conditions, forcing them to live in abject poverty.
As the government of Kenya takes steps to address wage disparities that the guards face, companies outsourcing security services ought to ensure that the suppliers adhere to the new standards. Beyond mere compliance, this directive serves as an opportunity for corporates to align their outsourcing practices. PSRA has begun issuing Guard Force Numbers (GFN) to individual private security service providers such as private security guards, corporate security officers, and any other individuals providing security services. For any such person who falls under this criteria, employed by a government institution, agency, or body, by any security company, corporate entity, organization, individual, association, or any entity recognized by law, the new terms of employment will be the same. Evidently, this new directive cuts across all entities, greatly affecting those that outsource security services, consequently requiring them to relook into the relationship with their suppliers.
This directive has necessitated corporate entities to make key considerations when transacting with private security firms for security services. In light of the proposed wage increase, outsourcing corporate entities are required to carry out a thorough reassessment; One paramount consideration is ensuring legal and regulatory compliance- corporate entities are required to conduct due diligence when outsourcing security guards from private security providers to ensure that they meet the minimum wage requirement. In the event they outsource elsewhere, they still ought to meet the minimum wage requirement during contract negotiations. Failure of the same would result in pecuniary liability and/or imprisonment as aforementioned, and to some extent, reputational damage. Besides the increase in minimum wage, employers such as corporate entities as well as other entities recognized by law, are required to make remittances (statutory deductions) for the security guards such as NSSF, Social Health Insurance Fund, PAY, and Affordable Housing Levy (there is judgment delivered on November 28, 2023, declaring Housing Levy unconstitutional but the same has been stayed pending an appeal). With statutory deductions being mandatory, entities need to revisit their contracts with private security firms. This change has a significant impact on matters corporate compliance at local and international levels more so towards entities that labour-related matters can significantly affect their relationship with third parties if the entities fail to comply.