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Workers

Egypt's New Labor Law: A Major Milestone in Workers' Rights and Modernization

Strategic Insights

— 1 min read

Egypt's new labor law, officially enacted in May 2025 and effective from 1 September 2025, marks a significant shift in the country's employment landscape. The law aims to protect workers, modernize employment relations, and align national labor standards with international conventions. Key highlights of the new law include changes to employment contracts, wage increases, severance pay, and leaves. For workers, the law signals a new era of enforceable rights and dignity, while for employers, it means reviewing HR policies and ensuring compliance. However, challenges remain in implementation, particularly in educating employers and streamlining the legal framework.

Key Takeaways:

  • The new labor law requires employment contracts to be in Arabic, with 4 copies issued for the employer, employee, labor office, and social insurance. Contracts are assumed to be indefinite unless otherwise justified.
  • The law recognizes remote, part-time, and gig/platform work as valid types of employment.
  • Employees have the right to a 3% yearly wage increase, calculated on their insurable wage.
  • For terminated workers, severance pay is now paid as 2 months' wages per year of service.
  • Women are entitled to reduce working hours by 1 hour daily from the 6th month of pregnancy and are exempted from overtime for up to 6 months after childbirth.
  • Employers with 30+ employees must contribute up to 0.25% of the minimum social insurance wage to the training fund, with exemptions for those with internal training programs.
  • The law offers more flexibility for employees, including changes to various categories of leaves.

Statistics:

  • 3% yearly wage increase on insurable wage
  • 2 months' wages per year of service as severance pay
  • 1 month's wage for each year of service for end of service compensation for those on certain fixed-term contracts
  • 0.25% of minimum social insurance wage to be contributed to the training fund by employers with 30+ employees
  • Up to 6 months' exemption from overtime for women after childbirth

Sources:

  • Mondaq Ltd, 2025 - Tel. +44 (0)20 8544 8300 - http://www.mondaq.com
  • Nexdigm Private Limited, 2001 Urmi Estate, 20th Floor 95 Ganpatrao Kadam Marg Lower Parel Mumbai 400013 INDIA, Tel: 226730 9000 Fax: 226730 9000 E-mail: jiten.ganatra@nexdigm.com URL: www.nexdigm.com

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