Egypt’s New Draft Labor Law: Key Changes and Employer Implications
Africa Focus
Nadine KhaledSenior Counsel,Employment & Incentives
Egypt is undergoing a transformation in its labor landscape with the introduction of a new labor law. This change aims to modernize certain aspects of employment regulations, expand protections, and address the evolving needs of the workforce. For employers, understanding the key changes and their implications is essential to ensure compliance and to tackle the risks presented by the new legal framework.
The new draft law applies to all private sector workers in Egypt, with explicit exclusions of state employees and domestic workers. It introduces clear definitions and protections for irregular (non-regular) and informal sector workers.
The law emphasizes on the prohibition of discrimination based on religion, gender, origin, disability, or social status. It strictly forbids forced labor, violence, harassment, and bullying in the workplace. Employers must review and update their workplace policies, provide training to staff, and implement robust mechanisms to prevent and address discrimination and harassment. Failure to comply could result in legal liability and reputational damage.
A procedural change is the requirement for written employment contracts to specify all essential details and be issued in four copies for the worker, employer, social insurance authority, and labor office. Employers must also maintain employment files, which could now be electronic and not only physical, for each worker, to be retained for at least five years after termination.
The new law introduces a tiered system for annual leave, with increased entitlements based on years of service and special provisions for persons with disabilities. Other changes include leave entitlements such as emergency leave (7 days), paid maternity leave (4 months), and sick leave as determined by medical authorities. Employers must update their leave policies, track entitlements accurately, and ensure that leave is scheduled and compensated as required. This may impact workforce planning and operational continuity, especially in sectors with high staff turnover.
The law sets a minimum wage and establishes the National Council for Wages to periodically review and adjust minimums and allowances. An annual allowance of not less than 3% of the insurance wage is mandated and introduced. Employers must monitor wage adjustments, budget for mandatory increases, and ensure payroll systems are updated to reflect new minimums and allowances. Non-compliance could result in penalties.
Termination procedures are amended for both fixed-term and open-ended contracts. The law stipulates notice periods, compensation for unjustified termination, and requires that dismissal is only permissible by a labor court judgment. Employers must ensure that all terminations are justified, properly documented, and follow due process. Unjustified or procedurally incorrect terminations could result in significant compensation liabilities and legal challenges.
For unjustifiable termination of an indefinite term contract the compensation would be a minimum of two months’ wage per year of service and for a fixed term contract, the compensation would be one month wage per year of service, if the employer terminates the contract after five years.
Women are guaranteed equal pay for equal work and are entitled to four months of fully paid maternity leave, with additional protections (reduced working hours and prohibition of overtime working during pregnancy and after childbirth.
The law also imposes strict limits on child labor. Employers must ensure compliance with gender equality and maternity provisions, adjust work schedules for pregnant employees, and strictly adhere to child labor regulations. Non-compliance could lead to legal sanctions and reputational harm.
Employers are obligated to provide a safe work environment, conduct risk assessments, and train workers on safety procedures. Penalties for breaches have been significantly increased. Employers must invest in safety infrastructure, conduct regular training, and maintain compliance with safety standards. Failure to do so could result in increased fines, work stoppages, or criminal liability in the event of serious incidents.
The new draft law applies to all private sector workers in Egypt, with explicit exclusions of state employees and domestic workers.
A dedicated framework for irregular workers is introduced, including mandatory registration and employer contributions to a fund supporting these workers. Employers in sectors such as construction, mining, and agriculture must register irregular workers and contribute financially to the relevant fund, increasing operational costs and administrative responsibilities.
The law formally recognizes remote work, part-time work, flexible work, and job sharing, granting these workers the same rights and obligations as traditional employees. Employers must adapt HR policies to accommodate new work patterns, ensure equitable treatment, and adjust benefits and entitlements accordingly. Ministerial decrees should be issued sometime in the future to regulate these new work patterns and their practical implementation.
Specialized labor courts and enhanced enforcement mechanisms are established, with increased penalties for violations. Employers face greater scrutiny and must be prepared for more rigorous enforcement of labor standards. Robust compliance programs and legal support will be essential to mitigate risks.
Egypt’s new draft labor law represents a significant step forward in aligning the country’s employment regulations with international standards and the realities of a modern workforce. Employers must familiarize themselves with the new requirements, update their policies and procedures, and ensure robust compliance mechanisms to avoid penalties and foster a fair, safe, and productive workplace.
For further information,please contact Nadine Khaled.
Published in October 2025
