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PRIME MINISTER DECREE NO. 2437/2021 ISSUING THE EXECUTIVE REGULATIONS OF THE SOCIAL INSURANCE AND PENSIONS LAW NO. 148/2019 (THE “LAW”).

Highlights

The long-waited executive regulations of the Law (the “ER”) was finally issued on the 28th of September 2021 and has been enforceable from the following date of its issuance.

Though the Law was issued in August 2019, the executive regulations of the abolished law and related decrees were still in effect pending the issuance of the ER.

The ER constitutes a complete renovated system relying on modern, adapted, up-to-date and effective rules of law to be implemented by the newly established authority; the National Organization for Social Insurance (“NOSI”).

This ER plays a key role for both employees and employers in public and private sectors.

This brief aims to highlight the key provisions regulated under the ER.

Scope of Application

The ER provides details on the categories covered by the social insurance whether with respect to the category of persons who are subject to the Law and the ER or the category of available coverages, as follows:

Insured Persons

  1. Employees, which includes:
  1. Employees in the administrative body of the State, public authorities and entities, and their related economic units;
  2. Employees in the public Sector, public business sector, their economic units, including the board of directors’ members and chairpersons delegated in public business sector companies;
  3. Temporary and seasonal employees;
  4. Private sector employees;
  5. Foreign employees subject to the Egyptian Labor Law;
  6. Domestic workers; and
  7. Employer's family members.
  1. Employers/Entrepreneurs; which involves 17 types of employers/entrepreneurs (who must be at least 21 years old), this category includes:
  1. Persons practicing for their own benefit, whether through commercial, industrial or agricultural activity which is organized by special laws or licenses;
  2. Joint partners in partnerships or corporates, chairpersons and board of directors’ members in joint-stock companies and directors in limited liability companies;
  3. Independent professions and syndicates' members;
  4. Agriculture land owners;
  5. Real-estate owners;
  6. Commercial agents; and
  7. Owners of domestic, environmental, and familial industries, and entrepreneurs.
  1. Egyptians working abroad, which includes:

Employees who work abroad by virtue of personal employment contracts;

Employees working for their own benefit;

Immigrants among the foregoing categories who preserve their Egyptian nationality;

Maritime workers on foreign ships;

Employees in international and regional organizations, and embassies inside the Arab Republic of Egypt.

It should be noted that there are two conditions that must be fulfilled to socially insure the persons under this category, (i) the insured person must request the subscription under provisions of the Law; and (ii) the insured person must be at least 18 years old.

  1. Irregular employees.

This category includes:

  • owners of properties with an “own to rent” model;
  • migrant workers;
  • craftsmen; and
  • street vendors and park attendants.

Contribution Rates:

  • The contribution rates to be deducted from the salaries of the insured persons are as follows:

Insured Person/Type of Contribution

Employee

Employer

Paid by Employee

Paid by Employer

Old age, Disability and Death

9%

12%

21%

Bonus

1%

1%

-

Work-related Injury

-

1.5%

-

Sickness

1%

3.25%

4%

Unemployment

-

1%

-

TOTAL

11%

18.75%

25%

29.75%

 

Retirement Age:

According to the Law, the retirement age will increase 1 year starting from July 2032 to be 61 years and will increase gradually by one year every two years until reaching the age of 65 by 2040.

Pension Benefits:

  • The Law has increased the minimum pension amount to be 65% of the minimum social insurance salary. The said amount will be subject to annual increase in accordance with the inflation rates increase with a maximum of 15% in June of each year.
  • Additionally, insured persons will be eligible for pension benefits after at least 15 years of contributions, instead of 10 years as stipulated under the old social insurance laws.

Insured Categories

The Law and the ER cover the following categories:

  • Old age, disability and death;
  • Work-related injuries;
  • Sickness; and 
  • Unemployment.

Key Provisions

Social insurance file

The ER has stressed on the importance of the insured person file which includes all their data and documents to calculate their rights and obligations. These files must be created by NOSI.

Moreover, ER lists the obligations, powers and rights of NOSI with respect to the filing, archiving, notifications of concerned persons, documents and subscriptions fulfillment concerning each category of insured persons.

Additionally, NOSI must now establish electronic means besides a website to receive all data, documents and files from subscribers as well as providing e-signature for files.

It is worth mentioning that employer/entrepreneur can now have their own social insurance unit by virtue of a license granted by the chairman of NOSI, at their request. Consequently, employer must create files for all of their insured employees.

The ER lists the documents required (i) at the beginning of employment relationship; (ii) during the subscription period; and (iii) following the termination of employment relationship.

Subscription procedures

The ER stipulated the exact procedures to be followed by employers in each of the following cases:

  1. If employer has several branches and requested to unify the subscription of their employees’ files of such branches.
  2. To file a subscription request at the beginning of the employer’s business activity.
  3. Obligations of private sector employers and required documents for their file subscription.

Funding system

  • The Law has resolved the financial entanglement between NOSI, the National Treasury and the National Investment Bank. The basic and variable salaries are now compiled into the comprehensive social insurance salary.
  • A unified fund was established for collecting and investing the social insurance contributions of insured persons of all categories (the “Fund”). The ER also determined the Fund rights and competencies, its Board of Trustees (“BOT”) composition and members requirements, in addition to their obligations and competencies.
  • The ER stipulated in detail the regulations and provisions required for the establishment, management and calculation of the social insurance contributions.

Penalties:

  • The amounts of the financial penalties were increased to be ranging between EGP 20,000 to EGP 100,000 per each committed violation.
  • Penalties are now imposed on the actual responsible person and not only on the employer.
  • Most of imprisonment penalties were cancelled except in cases of employer’s negligence towards injured employees or violations incurred by officials of NOSI.

Other Key Provisions

Finally, it is also important to mention that the ER has regulated the following topics:

  • The rules related to the establishment and management of the different social insurance accounts (e.g., the pensions accounts, the work-related injuries’ account);
  • Forming an expert committee, which main competence, is to undertake different sorts of evaluations to the social insurance accounts;
  • subscriptions determination and collection of the same;
  • specific rules in case of work-related injuries, including beneficiaries’ categories, reporting procedures, file documents, proofing procedures, employees periodic medical examination, medical care and treatments;
  • unemployment insurance provisions, and
  • categories of death insurance beneficiaries, and the requirements to be fulfilled in each case separately.
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