Employment advantages in accordance with Egyptian laws

The Egyptian labor market is a large economic market refers to supply and demand with regard to employment, whether by the owners of companies and institutions or others, as the human resources represents the main foundation of all service, production and consumption activities in Egyptian society.

Labor is a major component of any economy, whereas Arab Republic of Egypt is always eager to expand its investments and foster a stable environment in order to provide job opportunities and reduce unemployment in the Egyptian market by guaranteeing all rights to the employees and issuing legislation in this regard.

Egyptian labor statistics for the year 2021

And according to the Central Agency for Public Mobilization and Statistics‘ labor market statistics, which include data of employment, average wages, average working hours, and unemployment rates, and according to the annual research for the year 2021, which was released in September, the number of employees is approximately 27.2 million and 2.2 million jobseekers.

Governing law of the Egyptian labor market

The Egyptian Labor Law No. 12 of 2003, regulated the relationship between the employer and the employee in the private sector, including employee rights and employer duties such as annual leave, sick leave, maternity leave, minimum wages, working hours, termination, appointment and dismissal, and retirement.

In addition to the ministerial decisions that complement the Egyptian Labor Law, the provisions of the Egyptian Civil Law shall be applied wherever there are no provisions in either the Egyptian Labor Law or the ministerial decisions

In our article, we shed light on the most important aspects regulated by the Labor Law – organizing the work of foreigners – the individual work contract – wages – leaves – working hours – end of service gratuity – termination.

First: Regulating the Work of Egyptians Abroad and Foreigners in the Arab Republic of Egypt

With regard to regulating the work of Egyptians abroad, the Egyptian Labor Law was enacted, under which the competent ministry, in collaboration with the Ministry of Foreign Affairs, monitors the implementation of international agreements and contracts relating to Egyptian workers abroad and discusses the resolution of disputes arising from the implementation of these agreements and contracts.

According to the Egyptian Labor Law, foreigners must obtain a work permit from the competent ministry and be authorized to enter and reside in the country for the purpose of work to be able to work in the Arab Republic of Egypt.

Second: The minimum wage according to Egyptian law

Taking into account the high cost of living, the National Council for Wages established a national minimum wage that includes living expenses. It also established the minimum periodic annual increase shall not be less than 7% of the basic wage in which social insurance contributions calculated.

The National Wages Council also approved an increase in the private sector minimum wage from 2,400 to 2,700 pounds that shall be applied from January 1, 2023, and that the minimum value of the periodic annual increase shall not be less than 3% from subscription wage which was stipulated in Social Insurance and Pensions Law with a minimum of 100 pounds.

According to Article 53 of the executive regulations of the Social Insurance and Pensions Law No. 148 of 2019, the minimum subscription wage is set at 1,000 pounds per month, with a maximum limit of 7,000 pounds per month, as of 1/1/2020.

The minimum and maximum limits shall be increased by 15% on 1st January of each year, therefore, starting from 1/1/2023 the minimum Employee ‘s subscription wage Shall be 1700 EGP instead of 1400 EGP and the maximum shall be 10900 EGP instead of 9400 EGP.

Third: Leaves types according to the Egyptian Labor law

Regarding holidays the Egyptian Labor law regulates all types of holidays, employees are entitled to 21 working days of fully paid leave per year. The annual leave entitlement is increased to 30 working days once the employee reaches 50 years of age, or in case the employee’s service with one employer or more reaches ten years.

If the worker’s employment ends before he has exhausted his annual leave balance, he is entitled to the wage that corresponds to this. Official holidays shall not be counted as part of the vacation days, the employee is entitled a fully paid leave in the public holidays which is determined by the competent minister with a maximum 13 days annual.

And regarding sick leave, if an employee is sick, he/she has the right for a sickness leave that is determined by the concerned medical authority.

An employee who has completed 5 continuous years of service with the employer shall have the right to leave for 1 month (30 days) with full pay for performing religious pilgrimage duty or visiting Jerusalem. This leave shall be granted only once throughout his service period.

Fourth: Working hours and the method of calculating overtime hours

Pursuant to the Labor Law, employees should not work more than eight hours per day or a total of 48 hours per week, excluding meal and rest periods that cannot be less than one hour per day, when the employees are required to work for extra hours, the law states the maximum actual hours that should be worked, and which must not be exceeded are ten hours per day which means that overtime shall not exceed 2 hours per day.

The employer must first determine the employee’s hourly pay rate before calculating overtime pay for each additional hour worked. Unless otherwise specified in the work contract, this is accomplished by dividing the monthly salary by 30 days, and then dividing the average daily wage by the number of working hours per day (8) eight hours, to determine the employee’s hourly wage.

Based on the foregoing, the following method will be used to calculate the overtime:

• The monthly salary ÷30 days, then the output ÷eight hours, then the final output x the additional working hours (two hours maximum), taking into account the overtime timing ratio specified above.
• Article one of labor law defined night as the period between sunset and sunrise, thus daytime working hours refer to the hours in which the employee works between sunrise and sunset.
• In addition to his original wage, the employer must pay the worker an additional wage agreed upon in the employment contract, as long as it is not less than the wage to which the worker is entitled, plus (35%) for daytime working hours and (70%) for nighttime working hours.
• In terms of working on a day of rest, the employee is entitled to the same compensation as his wage for that day, and the employer is entitled to compensate him by another day during the following week, which means that the worker receives his original wage for this day in addition to the wage of an additional day in addition to a day off.
• However, if the employment occurred on an official holiday, the employee is entitled to double this wage for each of these days (in addition to his wages that he is originally entitled to on that day.

Fifth: women’s rights according to the Egyptian law

The Egyptian labor law regulates women rights. For example, the legislator granted ninety days of paid maternity leave, but that leave cannot be used more than twice during the and also granted the worker the right to breastfeed her child for the first twenty-four months.

Following the date of delivery, there are two more periods for breastfeeding, each of which is at least half an hour long, and she has the right to combine these two periods, provided that they are counted from working hours and do not result in a wage reduction.

Sixth: End of service gratuity according to the Egyptian law

The law specified cases of dismissal of the employee, as well as the end of service gratuity, which states that after the age of sixty, the employee is entitled to a reward of half a month’s wages for the first five years, and a month’s wages for the following years.

Finally, if the employer terminates the contract, the worker is entitled to compensation for two months of the total wage for each year of service, in addition to all legally determined dues.

Guarantee the rights of workers in all sectors

Based on the foregoing, and affirming the Egyptian legislator’s eagerness to guarantee the rights of workers in all sectors, as well as to facilitate craft work and others, the Senate approved in January 2023 after months of deliberation, on the issuance of new articles of the Labor Law that shall be published and implemented, in order to achieve the best outcome to preserve the rights of the worker and the employer.