Mbadi on the Spot Over Illegal Salary Deductions

Parliament has summoned National Treasury Cabinet Secretary John Mbadi to explain why his office has failed to act on illegal salary deductions violating the one-third rule. This comes after employees reported their payslips falling below the required limit due to increased taxes and other deductions.

The Employment Act, 2007, protects workers by ensuring employers cannot deduct more than two-thirds of an employee’s basic salary. It also requires employees to take home at least one-third of their basic salary after all deductions. This safeguard, commonly called the “one-third rule,” ensures workers have a minimum income for their basic needs.

Violating this rule is a criminal offense, and employers found guilty face penalties. They must also refund employees for any amounts unlawfully deducted from their pay.

The law further introduces a two-thirds salary rule, which limits deductions from an employee’s gross salary to no more than two-thirds. This regulation helps manage employees’ financial well-being by limiting how much debt they can take on using their wages.

Recent reports indicate that higher taxes and deductions have caused some employees’ net salaries to fall below the one-third threshold. This breach has sparked concerns about financial hardships for workers, prompting Parliament to demand accountability from the Treasury.

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Lawmakers want CS Mbadi to explain why the government has not enforced the one-third rule despite clear legal requirements. They also seek clarity on measures the Treasury will take to ensure compliance and protect workers’ rights.