The long-awaited decree regarding minimum wage has finally been issued. Decree No. 57/2021 was issued on the 13th of September 2021 by the Minister of Planning and Economic Development (the “Decree”), settling the question of determining the minimum wage for the private sector in Egypt.
The Decree sets the minimum wage for the private sector at EGP 2,400 as of 1 January 2022. The minimum wage is based on the definition of wage under the Labour Law No. 12 of 2003 (the “Labour Law”); which means that it will include both fixed and variable salaries.
In addition, the Decree highlights that companies facing economic difficulties may be granted an exemption to apply the minimum wage obligations upon submitting an exemption request, through its affiliated unions, prior to October 31st, 2021. The request must include the reasons for obtaining such exemption and be supported with the relevant documentation.
While the Labour Law stipulates for an annual periodic raise at a minimum percentage of 7% of the basic salary, the Decree sets the minimum annual periodic raise for the private sector at 3% of the social insurance participation salary and with a minimum of EGP 60. It is worth adding that the Social Insurance Law defines the participation salary as “the cash consideration received by the insured person from his/her employer for their work”.
To conclude, the Decree introduces and regulates some key matters and is effective with immediate effect except for the application of the minimum wage requirement which will be applied in January 2022 (as mentioned above).