The Cooperative Bill 2023, recently approved by the Cabinet, will penalize employers who fail or delay to remit employees’ deductions from salaries to Sacco accounts within 7 days.
The Bill proposes that employers who fail or delay to remit the deductions shall pay the amount deducted with compound interest accrued at a rate of not less than 5% per month.
According to Cabinet Secretary for Cooperatives and MSMEs Development, Simon Chelugui, the Bill is now at the Attorney General, awaiting approval for submission to the National Assembly.
“If enacted, employers who make deductions from employees but fail to remit them to respective cooperatives within seven days will be punished. In the event of this, the Commissioner of Cooperatives may write a notice to appoint any person, bank, or institution to be an agent and recover the debt on behalf of the Cooperative,” he said.
The CS disclosed the development during a meeting with the African Confederation of Cooperative Savings and Credit Associations officials in Naivasha recently.
Chelugui regretted that there were reports of many employers who have been deducting money from employees’ salaries and failed to submit to Saccos resulting to trouble for both the Saccos and their members (employees).
“At the moment, we hear about non-remittances of up to Ksh4 billion. You can imagine a cooperative giving a member loans in anticipation of the salary to come, but the deductions end up not being remitted,” he said.
At the same time, the Bill will also solve the issue of the Sacco Board of Directors defrauding members, for instance, where Directors defraud their members and then resign to form new Saccos.
By Amos Kerich
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