Jaramogi University to Reimburse January’s Housing Levy Deductions

Jaramogi Refunding January Deductions.

Jaramogi Refunding January Deductions.Jaramogi Oginga Odinga University of Science and Technology Refunding Housing Levy Deductions.

Background:

Recently, Jaramogi Oginga Odinga University of Science and Technology,  announced plans to reimburse all staff members for housing levy deductions. The deductions were made in January 2024. This decision stemmed from a Court of Appeal ruling on January 26, 2024. The ruling denied the government’s application to continue collecting the levy until the appeal process concluded. Consequently, the university had already processed payroll and deducted the levy for January before the ruling was issued.

Legal Context:

The Court of Appeal’s decision upheld a previous High Court ruling that deemed the housing levy unconstitutional. On February 26th, the Court of Appeal affirmed that the levy’s implementation lacked a proper legal framework. This ruling echoed the High Court’s verdict from November 2023. The previous ruling had  declared the Finance Act 2023 unconstitutional . Hence incorporating the housing levy, unconstitutional under Article 10, 2(a) of the Constitution.

Impact on Employees:

The housing levy is an obligatory component of the Finance Act. It  commenced deductions from employees’ salaries in July 2023. Under this scheme, employers were obligated to remit 1.5% of employees’ earnings, with employees matching this contribution. The aim was to finance the construction of affordable housing for low-income earners.

Response from Employers:

In light of these legal developments, the Federation of Kenya Employers (FKE) advised its members to suspend further housing levy deductions. This directive aligns with the Court of Appeal’s decision, indicating a broader acknowledgment of the levy’s legal shortcomings.

Resolution:

As a result of the Court of Appeal’s ruling and subsequent legal implications, Jaramogi Oginga Odinga University of Science and Technology pledged to refund housing levy deductions to its staff members. According to an internal memo from the Deputy Vice-Chancellor, these refunds are expected to be processed by February 9, alleviating the financial burden placed on employees due to the levy’s contentious legal status.

Jaramogi Refunding January Deductions.