- Overview: Egypt
- Global PEO and payroll
- Global HR Compliance
- Work permit for hiring expats via PEO
- Expand without a company set up
- Contractor vs. employee: which is better?
Global HR Compliance in Egypt
If you hire an international workforce, or plan to hire, then Hiring and Firing Workforce in Egypt Guide below will help you understand the nuances of labor legislation in the country.
When the company is planning to enter a new foreign market of Egypt and has a need to employ a local national there, the first question to answer is how it is going to make local hires.
We have designed a Global Employer of Record service to help you outsource global employment of your foreign workforce to companies like ours.
This solution helps you employ your global sales force in Egypt as well as in other 180+ countries of the world, and provide pay and benefits to your employees, as well as administer any business expenses with our help.
Our solution is different from other hiring modes in that it helps you engage your foreign workforce in full compliance with the local labor legislation. This means you are protected from any non-compliance and employee misclassification risks while we bear all employment risks, not you.
So, it looks very much like hiring your in-house sales force in your home country. However, you focus on only on your global business development while we admin your global HR. In addition, you don’t need to open your own entities in the foreign countries and can leverage our infrastructure in Egypt instead. With our service, you can become a global company with reduced costs and minimized time and effort on your end.
Your employed foreign sales force will devote 100% of their time to your company product and may stay with you longer than foreign independent sales reps.
Global Employer of Record solution is 100% compliant solution that guarantees you and your employees fully compliance with local legislation in Egypt .
We are experts in global workforce employment in Egypt, and our goal is to become your single provider. Instead of working with numerous local staffing agencies and legal advisors, Acumen International can solve your global business challenges and save you time, costs, and resources.
Our team of English-speaking professionals frees you from working through language nuances. Acumen International works 24/7 and can assist you whenever you need, regardless of time zones. Our goal is to create tailored labor solutions for you that are managed legally and in full compliance with the local employment laws.
With our knowledge and deep understanding of local nuances, you easily satisfy your need for skilled professionals in your global industry. With our qualified local partners, you can trust that your global workforce satisfies all local tax, social security, and immigration requirements in Egypt.
See Hiring and Firing Workforce in Egypt Guide below for a general overview of labor rules and regulations in the country. Or contact us if you need to employ workers in Egypt or would like to get more details.
Hiring and Firing Workforce in Egypt Guide
This article is written to help those who are contemplating expanding their business operations in Egypt but are still not sure what to expect, what doing business in Egypt will be like. Please note that this article is simple an overview of the country’s employment relationship, hence must be no substitute for professional legal advice.
Below are a few tips on what the Egyptian employment law says about hiring and firing your workforce in the country.
# Employment Agreements
The Egyptian Labor Law distinguishes between the employment contracts entered into for a definite period and those entered into for an indefinite period, and provides special rules for each case.
Permanent employment contracts
Under indefinite contract, an employee is hired for a position for an undetermined period of time. It is presumed that as long as the employee performs his/her job requirements satisfactorily, the employee is entitled to remain on the job for as long as he/she wishes, until retirement.
Casual employment contracts
Casual employment is employment whereby the employee performs tasks that do not fall within the employer’s regular scope of activities. This form of employment may not exceed six months in any one year. Such employment terminates automatically upon the completion of the work for which the employee was employed.
Fixed-term employment contracts are permissible, and the maximum duration of those contracts is five consecutive years with the same employer.
# Employment Termination and Severance Pay (Dismissal)
On Employee will
If an indefinite period contract is terminated by the employee, it shall be based on legitimate and adequate cause related to his/her health, social or economic conditions.
According to the Labor Law, the employer, in general, is not entitled to terminate the employment contract, whether it is for a definite period or an indefinite period, unless the employee breaches the contract by committing a “grave fault.” The Labor Law identifies the following as a grave fault
- If the employee misrepresents his/her identity to the employer, or presents fraudulent certificates or recommendations.
- If the employee commits an error that causes grave economic loss to the employer, as long as the employer notifies the competent authorities of the event within 24 hours of the employee’s knowledge thereof.
- If the employee does not follow instructions necessary to insure the safety of coworkers and the workplace despite receiving a written warning, provided that the instructions are in writing and are posted in a prominent manner.
- If the employee is absent from work for a period exceeding 20 nonconsecutive days or 10 consecutive days in one year, without a valid excuse, provided that dismissal is preceded by a written warning by the employer to the employee (by registered letter, return receipt requested) after an absence of 10 days in the first case and five days in the second case.
- If the employee competes with the employer’s activities.
- If the employee reveals the trade secrets of the employer and it leads to serious damage or harm to the establishment.
- If the employee is inebriated or affected by an intoxicating substance during working hours.
- If the employee assaults the employer, the responsible manager or one of the supervisors in the course of work or as a result thereof.
- If the employee breaches the provisions governing strikes pursuant to the Labor Law.
No procedures are required for an enforceable separation agreement as long as both parties agree in the agreement.
# Notice period
With regard to the indefinite employment contract, if the employment period is less than 10 years, a two months’ notice is required by the employer or the employee. If the employment period exceeds 10 years, a three months’ notice is required.
# Severance payments
The Egyptian Labor Law does not provide for severance pay except for employees who work beyond the age of retirement. However, the employer is obliged to provide severance payment in the following cases:
- If the severance payment is stated in the employment contract or in the employer’s internal regulations.
- If the severance payment becomes a custom that constitutes an acquired right. There are two conditions that would render severance payment customary and an acquired right:
- if severance pay is given to all employees or all employees of a specific category; and
- if the employer continues to offer severance pay to such employees constantly and consistently for five years
# Employee Benefits and Contributions
Public holidays entitlement, annual leave, paid vacation for pilgrimage purposes, sick leave, maternity leave.
# Minimum statutory salary
According to the Labor Law, the National Council for Wages sets a minimum wage level, taking into consideration the cost of living and striking a balance between wages and prices. It should be taken into consideration that most of the private sector applies the minimum wage applicable to the public sector despite the lack of any formal decree.
# Probationary period
The probation period for all employees should not exceed three months from the date the employment began. In addition, the employee may not be appointed under probation with the same employer more than once.
Generally, an employee cannot work more than eight hours in a day or 48 hours in a week (excluding meal and rest periods).
As for the overtime hours, the rate of pay for those hours shall be agreed upon in the individual or collective labor contract. The compensation for the overtime hours may not be less than the original compensation that the employee is entitled to, plus 35% for the hours worked during the day (the period between sunrise and sunset) and 70% for the hours worked at night (the period between sunset and sunrise). If the overtime hours are on the employee’s day of rest, then the employer shall pay the employee double salary for that day and the employer is required to give the employee another day in lieu of that day of rest in the following week. In all cases, the actual working hours shall not exceed 10 hours per day.
# Work hours
An employee cannot work more than eight hours per day or a total of 48 hours per week, not including meal and rest periods. The competent minister may decrease the working hours for certain types of employees or industries.
# Annual Leave
An employee with at least one year of service is entitled to 21 working days of annual leave. This will be increased to 30 working days when the employee’s service is 10 years or more. Moreover, the annual leave shall be for a period of 30 working days for those who have reached 50 years of age. Official holidays are not calculated within the annual leave. If the employee refuses in writing to take his/her annual leave, the employee will be considered to have waived his/her right to take pay in lieu of the annual leave.
# Sick Leave
According to the Labor Law, if an employee is sick, he/she is entitled to sick leave as determined by the concerned medical authority. During sick leave, the employee shall be entitled to his/her salary as stipulated in the Social Insurance Law. An employee who has been proven to be sick shall be entitled to a paid sick leave at the rate of 75% of his/her social insurance wage for period of 90 days, to be increased to 85% thereafter. Sick leaves will be payable to the employee for up to 180 days.
# Parental Leave
a female employee who has spent at least 10 months in service has the right to a fully paid maternity leave of 90 days including the period where she was absent from work prior to delivery. The leave is granted three times only throughout her service period. For establishments that employ more than 50 workers, a female employee has the right to an unpaid maternity leave for a maximum period of two years, in addition to the paid leave. This leave is also only granted twice throughout her service period.
The Labor Law does not address paternity leave.
Acumen International can help you fast-track your possibilities of entering and expanding your business in Egypt by providing you with an Employer of Record services. Our unique mix of PEO/EOR solutions will enable you to jumpstart your global operations almost immediately, cost-effectively and compliantly without any requirement to set up a legal entity first or thereafter.