As of 1 September 2026, Egypt’s new Labour Law No. 14 of 2025 (the “Labour Law”) marks its first year in force. The Labour Law replaced labour law No. 12 of 2003 (the “Former Labour Law”) and brought significant reforms designed to modernise Egypt’s employment framework.

One year on, a recurring challenge has emerged for employers: while many of the Labour Law’s mechanisms are clear on paper, putting them into practice often depends on administrative procedures and practices that have not kept pace with the legislation.

This article covers the provisions that have been hard to implement, what employers have changed, what remains unclear and the practical lessons.

Provisions that have proved difficult

Mutual Separation: the Labour Law and its implementing decrees have brought clarity to termination by mutual consent. Ministerial Decree No. 187 of 2025, issued in September 2025, confirms that mutual termination, whether of a limited-term or unlimited-term contract, does not require the labour office approval that applies to employee resignations. The parties simply document their agreement, including confirmation that the employee has received their financial entitlements, and the Ministry of Labour has published a model agreement for this purpose.

In practice, the mechanism falls short at the deregistration stage. Employers must notify the National Organization for Social Insurance (“NOSI”) when employees leave, but in our experience NOSI’s procedures do not yet recognise mutual termination as a valid ground for deregistration, and officials typically insist on a resignation instead.

As a workaround, employers often ask departing employees to sign a resignation alongside the settlement agreement. This delays the process, given the new procedures added on resignations requiring labour office ratification. This creates an inconsistency between the agreed basis for termination and the supporting documents, and may leave employees asking why they are “resigning” from a mutually agreed exit.

Annual increases: when does the clock start? Annual increases present a different payroll challenge. Under the Former Labour Law, the timing of annual increases was not expressly regulated and was instead addressed through periodic decrees. Ministerial Decree No. 15 of 2025, issued before the Labour Law came into force, provided that the minimum annual increase would apply according to each establishment’s fiscal year. Article 12 of the Labour Law, however, links the entitlement to the employee’s individual anniversary, with a minimum increase of 3% (three percent) of the insured wage becoming due upon completion of one (1) year from the employee’s hiring date or from the date of the previous annual increase.

For employers operating a single annual salary-review cycle, this raises a practical question: must HR track a separate increase date for every employee, or can increases continue to be administered on the company’s usual annual cycle?

Where employers have had to change practice

Contract administration: employment contracts must now be executed in four (4) originals: one for each party, one for the competent social insurance office, and one for the competent Labour Relations Office within the Labour Directorates. Ministerial Decree No. 214 of 2025 builds on this requirement by further regulating how employment contracts are concluded and how they are submitted to the Labour Relations Office. The employer must also notify the Labour Relations Office of any renewal, non-renewal, expiry or termination of the employment contract within fifteen (15) days of the event occurring.

Payroll, leave and the push to go digital: several changes under the Labour Law have required employers to update their payroll and HR systems. On the payroll and leave side, employers must now apply: (i) a minimum annual increment of 3% (three percent) of insured wage; (ii) one hundered and twenty (120) days’ maternity leave, available from the first day of employment; and (iii) new annual leave categories.

The Labour Law also aligns employment practice with the government’s e-payment and cashless economy initiatives. Employers must now pay salaries by transfer to employees’ bank accounts, with the transfer serving as sufficient proof of payment.

Internal work regulations: Decree No. 162 of 2026 (the “Decree”), effective 14 August 2026, is the largest change of the year. Every private establishment with ten (10) or more employees must adopt an internal work regulation covering recruitment, KPIs, promotions, pay equity, anti-harassment, grievances, discipline and any remote or flexible work. The regulation must preserve all existing benefits and be filed for certification.

Interpretive uncertainties

New work patterns broad Coverage, missing rules: the Labour Law significantly widens the scope of employment, recognising remote work, part-time work, flexible work and job-sharing as “new work patterns”, with the Minister empowered to add others. Any work performed in a non-traditional way for the benefit of an employer, under its management or supervision and in exchange for pay in any form, now falls within the scope of the Labour Law, and employees working under these patterns enjoy the same rights and bear the same obligations as traditional employees, adapted to the nature of their work. Ministerial decrees were due within six (6) months of the Labour Law taking effect to define these patterns, provide model contracts and work regulations, and set out how the relationship is evidenced and rights enforced. None has been issued to date.

The resulting gaps carry real risk. The Labour Law draws no clear line between employment and freelance work, leaving independent contractors exposed to misclassification as employees and to disputes over benefits, insurance and other labour rights. Job-sharing raises its own uncertainties around wage distribution, workload and division of responsibilities, which, without guidance, could lead to disparities and unclear entitlements. As a result, arrangements previously used to structure work outside a formal employment relationship may no longer be safe to rely on, and employers should review them now rather than wait for the implementing decrees.

Resignation notice: the Labour Law sets a uniform notice period of three (3) months for ending unlimited-term employment contracts. Yet the Decree bars internal regulations from imposing a notice period on resignation, allowing one only in mutual-termination arrangements.

Practical lessons for HR and legal teams

1. Plan exits around the administrative process, not just the legal one. When using mutual termination, raise NOSI deregistration with the employee at the outset. If a resignation is still needed, make sure the settlement agreement explains why it is being signed and confirms the separation was mutually agreed. Allow extra time for Labour Office ratification.
   
2. Take a defensible position on annual increases. Until the timing question is clarified, the safest approach is to make sure no employee receives the 3% (three percent) minimum later than their individual anniversary. Employers that keep a single review cycle may need to advance increases for some employees. Document the approach chosen and the reasoning behind it.
   
3. Build a contract compliance calendar. Track the four (4) executed originals, the filings with social insurance and the Labour Relations Office, and the notification deadline of fifteen (15) days for every renewal, non-renewal, expiry and termination.
   
4. Finish the move to digital payroll. Confirm every employee is paid by bank transfer and keep transfer records as proof of payment. Check that payroll systems reflect the new increment and leave entitlements.
   
5. Treat the internal work regulation as a priority project. Audit current policies against the Decrees’ mandatory content, carry over every existing benefit, and file for certification promptly.
   
6. Review non-traditional arrangements now. Map freelance, consultancy, remote and job-sharing arrangements and assess the misclassification risk of each. Do not wait for the implementing decrees.

Conclusion

Taken together, these examples suggest that the first year of the Labour Law has been as much a test of implementation as of legal interpretation. For employers, effective compliance requires translating legal requirements into workable HR, payroll and social insurance processes. The practical lesson is therefore to consider not only what the law requires, but also how that requirement will be documented, processed and evidenced in practice.

The contributors to this article are Alia Monieb, Partner - Head of Employment; Seif Elkably, Managing Associate; and Hana Abouelmagd, Junior Associate.