Employee Benefits in Egypt are laid out in the Labour Law, officially Labour Law No. 12 (2003), as well as in the Social Insurance Law and the Egyptian Civil Code. The Labour Law’s statutory employee benefits apply to all employment relationships where the employer is an Egyptian entity or individual and equally apply to subsidiaries, branches or other company types established by foreign companies. The legislation covers both Egyptian and foreign staff.
There are other considerations for foreign companies in the market for recruiting staff. In April 2022, Egypt’s Senate began drafting amendments to the 2003 Labour Law, which could change various aspects of the employment relationship. International companies intending to hire employees and operate payroll in Egypt must establish a legal entity and then function within this legislation framework, which provides safeguards and guarantees for the workforce.
Foreign companies’ responsibilities reach beyond simply complying with tax, social security, and payroll regulations. Failure to comply with specific rules applying to benefits and entitlements runs the risk of fines and sanctions. Employers must have a firm grasp of what is guaranteed for their employees, which will affect the employer-employee relationship. This is where Bradford Jacobs points you in the right direction, drawing on over 20 years of experience as a Professional Employment Organisation (PEO) and Employer of Record (EOR).
Employment legislation in Egypt is covered mainly by the Labour Law, officially Labor Law No. 12 (2003). The Law covers all relationships where the employer is an Egyptian individual or Egyptian-incorporated entity and applies to all local and foreign employees. Therefore subsidiaries, branches or other entities established by foreign companies in Egypt come under the Labour Law and must comply with its provisions.
National Minimum Wage (NMW): The monthly minimum wage as of July 2022 is EGP 2,700 for employees working for private sector companies.
Sick Leave and Benefit: The Labour Law and Social Insurance Law state that where a medical authority verifies illness or incapacity, the employee is entitled to 90 days leave at 75% of their salary and up to a further 90 days at 85%. Where employees have unused vacation, these can be converted to sick leave.
Working Hours and Breaks: The maximum is eight hours per day for a regular 40-hour week or up to 48 in a six-day working week. The Labour Law stipulates that schedules must be organised so that employees receive at least 24 hours of rest after a maximum of six working days. Employees should not work more than five hours without taking a break, and these should total at least one hour in a working day. Meal and rest breaks are not generally considered working hours.
Overtime: The Labour Law prescribes that daytime rates for overtime are 35% above the average hourly rate, 70% above the regular rate for extra night work hours, and double the standard rate for working on rest days (plus a day off in lieu). Employers requiring staff to work on official public holidays must pay them three times their usual salary.
Paid Vacations: Statutory paid vacation is 21 work days after completing one year’s service. Those who have worked for more than ten years with one or more employers receive 30 days, as do employees over 50. Employees qualify for a pro-rata allowance once they have worked for six months.
Public Holidays: The dates of the official holidays celebrated within Islam, Eid-al-Fitr and Eid-al-Adha, vary between years. Eid-al-Fitr marks the end of the month-long Ramadan, while Eid-al-Adha marks the end of the Hajj.
* Dates vary annually.
Maternity / Paternity / Parental Leave and Benefit: Proposals announced in January 2022 included a total of four months paid leave before and after the birth, increased from 90 days, with an absolute minimum of 45 days post-natal. Under the proposals, women will be entitled to three maternity leaves during their careers. The benefit is 100% of the salary, 75% from social security and the balance from employers. Employees must have worked at least ten months with their employer and supplied a medical certificate predicting the likely due date. In companies employing more than 50, mothers are entitled to up to two years of unpaid leave for childcare and can do this twice during their work. The Labour Law does not provide for paternity or parental leave.
Discrimination: Article 53 of the Egyptian Constitution purports to bar discrimination on religion, beliefs, gender, origin and race, language, disability, social status or political and geographic affiliations.
Termination / Severance / Redundancies: The Labour Law stipulates specific instances where employers can terminate contracts if employees commit several ‘grave faults’ as detailed in Article 69. If the agreement is terminated without a reasonable cause, there is no statutory requirement for severance other than the money owed, such as salary and bonuses. Severance payments are under review in proposals for the new Labour Code drafted in 2022. In theory, employees terminating the contract should serve two or three months’ notice depending on the service period, although employers have little practical recourse if this is not applied.
The Labour Law does not allow for collective dismissals or mass redundancies, but there are procedures where employers intend to end their operation due to economic or organisational reasons.
Notice Periods: Employees receive two months’ notice if employed for less than ten years and three months if used for more.
Egypt consolidated the social security system under the amended Social Security Law of 2019 for private and public sector workers and those in the largely unregulated informal economy. The law covers pensions for old age, disability and survivors and benefits including work injury, sickness and unemployment.
Statutory health insurance in Egypt is funded by contributions from employers and employees, based on the annual ‘social insurance salary’, calculated between the minimum and maximum bands on income. Employees’ social insurance salary increases by 15% in January each year (since 2021) and will increase according to inflation from 2028.
Employers contribute 18.75% of the total social insurance salary. Employees whose monthly insurance salary exceeds EGP 7,000 (€350, US$375) can choose to make extra payments to the National Authority for Social Insurance. Additionally, the Universal Health Insurance Law was adopted in 2018 and aims for complete coverage by 2032 to support poor households, the elderly and the disabled.
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