Employment Laws In Egypt

Contractual Agreements in Egypt

Contractual agreements in Egypt are governed by the 

• Egyptian Civil Code
• The 1978 Government Service Law No. 47
• Law No. 48
• Law No. 203, enacted in 1991
• The 2003 Law No. 12

The labor law in Egypt mandates that all employment contracts for both Egyptian and international employees need to be drafted in Arabic. Additionally, employers are also required to draw up an employment contract in three copies:

• One for the employer,
• One for the employee,
• One for the concerned social insurance office.

Types of employment contracts in Egypt

There are primarily two types of employment contracts acknowledged by the contract employment law in Egypt. They include:

Fixed-Term employment contracts

• Fixed-term contracts specify a definite duration for the employment relationship.
• They are usually for one year and can be renewed every year. 
• The maximum duration allowed for a fixed-term contract is five years.

‍Indefinite-Term employment contracts

• These contracts do not specify a fixed duration for the employment relationship. 
• According to Article 110 of the Labor Law in Egypt, indefinite-term contracts can be terminated if the employee is deemed inefficient or if the employee has committed gross misconduct that justifies dismissal.

Obligations and rights for both parties 

Mentioned below are some of the many obligations of workers, as outlined in Article 56 of the labor laws of Egypt.

• Obeying the employer’s orders and instructions related to the agreed-upon work.
• Maintaining workers’ holidays
• Commitment to treating the employer’s clients well
• Respecting colleagues and cooperating with them

In addition to this, employers are also advised to be aware of all the common global HR compliance mistakes to avoid any form of serious legal repercussions.

Working Hours and Overtime in Egypt

The labor laws of Egypt regulate working hours and overtime. Mentioned below is an overview of the same. 

Regular working hours

• According to the employment laws in Egypt, the standard working hours are set at 48 hours per week. 
• However, it is a common practice in Egyptian companies to follow 40 hours of work per week. 

Overtime regulations and compensation

Overtime work refers to hours worked exceeding the standard working hours. In such cases, employers are required to compensate their employees at a higher rate than regular hours. It includes

• Overtime on the day working - 35% * normal hourly wages.
• Overtime on night working - 70* normal hourly wages.
• Overtime on holidays - 2 times salary for that day. 

Minimum Wage and Compensation in Egypt

Egypt has a national minimum wage that is periodically revised by the government. The minimum wage is set to ensure that workers receive a basic level of compensation for their labor. 

Here are some key aspects of the same.

The minimum wage rate in 2024

• Full-time employees in Egypt are required to be paid in the official currency of the land, which is the Egyptian pound (EGP, ج. م).
• In January 2024, the national minimum wage for employees in the private sector was raised to EGP 3,500 by the National Wages Council of Egypt.
• Starting February 2024, the national minimum wage in Egypt is set at EGP 6000/month.

Factors affecting wage determination

Wage determination in Egypt is a complex process and can be influenced by multiple factors, such as economic, social, and regulatory considerations. It includes

• Economic conditions

Economic factors such as inflation, economic growth, productivity levels, and overall market demand and supply for labor play a significant role in wage determination. For example, in times of economic prosperity, wages may increase due to higher demand for labor. 

• Global and industry trends

Global economic trends, technological advancements, and industry-specific factors can also impact wage determination. Industries experiencing significant growth or undergoing structural changes may offer higher wages to attract skilled workers.

• Cost of living

Areas with a higher cost of living, such as urban centers, typically provide high compensation to their employees. This includes various components such as housing, transportation, utilities, and healthcare.

Employee Benefits and Social Security in Egypt

Employee benefits and social security programs are two important components of the labor law in Egypt. They provide workers with various forms of financial protection, healthcare coverage, and support. Some of the key aspects of these benefits include

Statutory benefits

Public health insurance

• According to the labor laws of Egypt, public health insurance is mandatory for all citizens of this country. 
• It is primarily governed by the Universal Health Insurance Law, which came into effect in 2019.

Public pension system

• With the implementation of the new law for social insurance in Egypt, the public pension system now provides coverage to almost all types of workers in the public and private sectors.
• This accounts for over 80% of the employed population.
• The executive regulations of the law have set the annual minimum wage for participation at 12,000 EGP, and the annual maximum wage is 84,000 EGP.
• Furthermore, the pension age is set to increase gradually to 65 years, starting in 2030 and increasing by one year every two years until it reaches 65 years in 2040.

Dependents’/Survivors’ benefits

• It is a form of financial support provided to the dependents of a deceased worker. This includes the widow, widower, children, parents, brothers and sisters. 
• The survivors’ pension is calculated similarly to the old-age pension.

Unemployment benefits

• The Social Insurance Law in Egypt mandates certain benefits to individuals during periods of involuntary unemployment.
• Eligible workers are entitled to receive unemployment benefits for up to 16 weeks.
• If the worker has made contributions for the last 36 months before the start of the unemployment period, the benefit period can be extended to 28 weeks.
• Unemployment benefits are usually calculated as 60% of the worker’s last month's wage.
• There is an eight-day waiting period before the benefits start to be paid.

Additional Perks and Benefits

13th-month pay

• Although not legally mandated by the employment laws in Egypt, most employers are known to provide a 13th-month salary as a bonus to their employees.
• The amount usually varies depending on the employee's annual salary. 
• It can be paid any time during the year, although the common norm includes the month of December.

Social security contributions and requirements

• Both employees and employers are required to make contributions to the social security system of 11% and 18.75%, respectively.
• .As of January 2023, the minimum social insurance salary is EGP 1,700, and the maximum is set at EGP 10,900.

Vacations and Paid Time-Off in Egyp

Let’s take a look at the labor laws of Egypt regarding leave entitlements. 

Annual leave entitlement

• Employees in Egypt who have worked for at least one year are entitled to 21 days of annual leave.
• Employees who have worked for more than ten years, serving at least one or more employers, get to receive 30 days of annual leave. 
• Employees aged more than 50 years are entitled to 30 days of annual leave.

Sick leave

• The labor law in Egypt mandates 180 days of paid sick leave for employees.
• An employee with a proven sickness record is entitled to 75% of their salary for the first 90 days with social insurance coverage.
• If the employee continues incapacitating due to illness, the compensation rate increases to 85% for the following 90 days.
• If an employee exhausts their entitlement to sick leave, they may be able to convert their unused annual leave into sick leave.

Public holidays and special leave

Maternity leave

• The Egypt labor law mandates 90 days of paid maternity leave for female employees.
• In order to avail the same, individuals are required to provide 45 days' notice before taking maternity leave.
• Additionally, to be eligible for maternity leave, female employees must be employed for at least 12 months by the same employer.
• The maternity leave pay is calculated as 75% of the employee’s average salary during the last 12 months.

Paternity leave

• As of now, the labor laws of Egypt do not mandate paternity leave for employees. 
• However, many companies offer this benefit to their employees.

Study leave

• Egypt labor law does not mandate study leave, although it may be offered by some employers.
• The study leave and pay duration might differ depending on the employer. 

Special leave

• Special leave is not yet mandatory as per employment laws in Egypt.
• It is an unpaid leave granted to an employee for specific reasons, such as to care for a sick family member or to attend a funeral.

Carry forward of leaves

• Under Egypt labor law, employees can carry over up to 30 days of unused annual leave to the next year.

Termination and Severance in Egypt

In Egypt, termination of employment and severance are governed by labor laws to protect the rights of both employers and employees. 

Grounds for termination: 

Below are some scenarios of possible termination of employment in Egypt.

Grounds for mutual exit

• Mutual Agreement
• Illness or Disability
• Retirement
• Changes in business circumstances

Grounds for termination during probation period

• Role misfit
• Poor performance
• Bad behavior
• Persistent absence from work
• Dishonesty

Grounds for termination due to poor performance

• Unsatisfactory performance even after PIP
• Did not show up to work due to illness

Grounds for termination with cause

• Breach of contract
• Serious misconduct
• Negligence of employee that resulted in serious damage to the employer
• Dishonesty
• Commits sexual harassment in the workplace
• Sentenced to life imprisonment by a final court judgment
• Infringement on the intellectual property rights of the employer
• Violating work regulations

Grounds for termination due to business redundancy

• Shutting down operations in the region
• Cash crunch
• Reorganization
• Reduced workload

Notice period and severance pay

• In indefinite contracts, the notice period is dependent on the length of service of the employee with the employer. 
• If the worker’s uninterrupted period of service with the employer is less than ten years, the notice period is two months. 
• If the service period exceeds ten years, the notice period is extended to three months. 
• In fixed-term contracts, either party of the contract must provide one month’s notice to the other party in case of resignation or if the employer wishes to terminate the contract.
• If an employee has been terminated for economic reasons, they are entitled to severance or redundancy payments.
• For the first five years of service, an employee is entitled to severance pay equivalent to one month’s salary for each year worked.
• For each subsequent year beyond the initial five years of service, employees get to avail severance pay at a rate of one and a half month’s salary for each year worked.

Discrimination and Equal Opportunity in Egypt

In Egypt, discrimination and equal opportunity in the workplace are addressed through various laws and regulations. They aim to promote equality and combat discrimination based on factors such as gender, nationality, religion, and disability.

Prohibitions against workplace discrimination

• The Labor Law (Law No. 12 of 2003) safeguards employees in Egypt against any form of discrimination. 
• More specifically, Article 35 of the aforementioned law prohibits discrimination based on gender, origin, language, religion, or other personal beliefs.

Health and Safety Regulations in Egypt

• Occupational Health and Safety Law (Law No. 12 of 1981) lays down the obligations of employers related to workplace safety measures, accident prevention, employee training, and risk assessments.

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FAQs

Q1: What is Article 47 of the Egyptian Labor Law?

Ans: Article 47 of the labor law in Egypt governs annual leave entitlement for employees. It states that employees are entitled to 21 days of annual paid leave, provided they have completed at least one year of continuous service.

‍Q2: What are the types of employment contracts in Egypt?

Ans: The labor laws of Egypt mandate two main types of employment contracts. They are, namely, fixed-term employment contracts and indefinite-term employment contracts.

‍Q3: What are the labor conditions in Egypt?

Ans: The labor conditions in Egypt encompass various aspects of employment, including working hours, wages, leave entitlements, and employee rights. They are aimed at protecting the rights and well-being of employees while balancing the interests of employers and the economy.

‍Q4: What is the notice period for employees in Egypt?

Ans: For indefinite-term contracts, the notice period varies depending on the length of service of the employee. For example, if an individual has worked for less than ten years with the employer, they are given a notice period of two months. For those who have worked for ten years or more, the notice period is three months. 

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