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January 15, 2021

By Gordon Barr, Ghazal Hawamdeh and Samir Kantaria

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COVID-19 related measures

Law no. 170 of 2020 in respect of the joint contribution to face some of the economic repercussions resulting from the spread of pandemics or natural disasters occurrence (the "Law") has been issued to include the following:

  • The Law provides that one percent of the net income of the employees resulting from their work shall be deducted monthly and for a period of twelve months.
  • Additionally, one-half percent of the net receivables from the pensions established in accordance with the Social Insurance Law shall be deducted as a contribution to face economic repercussions resulting from pandemics or the occurrence of natural disasters.
  • Employees working in the public and private sector shall be subject to the provisions of this Law.
  • It is permissible by a decision from the Cabinet, the proposal of the Minister of Finance and other competent Ministers, to exempt employees working in the economically affected sectors from this contribution whether in whole or in part.
  • It is also permissible to increase or shorten the deduction period mentioned above or to specify the period during which the deduction will be made in the future. It is not permissible to increase the total period of deduction for more than twelve months except after obtaining an approval from the House of Representatives.

The following employees shall be exempt from the deductions mentioned above:

  1. Employees whose net monthly income does not exceed EGP 2,000.

  2. Employees subject to pensions whose net monthly pension does not exceed EGP 2,000.

With thanks to Gordon Barr, Ghazal Hawamdeh and Samir Kantaria of Al Tamimi & Company for their invaluable contribution on this update.




Introduction of a New Social Insurance Law

A new Social Insurance Law has recently been implemented in Egypt and is aimed at unifying the laws relating to insurance and pensions across different sectors. In particular, the Social Insurance Law addresses the issue of insurance evasion, by increasing fines payable if an evasion is identified.

The key provisions in the Social Insurance Law are as follows:

  • A minimum pension entitlement to the value of not less than 65% of the minimum insurance subscription wage.
  • The value of existing pensions have increased due to inflation at a rate of up to 15% per year.
  • Establishment of incentives to insure employees who work informally.
  • An unemployment allowance is provided for, funded in part by the employer's 1% contribution from the employee's monthly wages.
  • The retirement age should reach 65 years by the year 2040, provided that the retirement age gradually increases from the year 2032.
  • A fine shall be imposed for those seeking to evade the obligations set out in the Social Insurance Law to the value of up to EGP 100,000 (approximately $6,330 USD).
With thanks to Gordon Barr, Roxanne Vesuvala and Ghazal Hawamdeh of Al Tamimi & Company for their invaluable contribution on this update.




Rights of disabled people in Egypt

On 19 February 2018, the Egyptian President ratified the Law for persons with disability No. 10/2018. The Law provides many positive reforms and covers health and media rights for persons with a disability; their right to education; vocational training and work. It also imposes legal and criminal protection for persons with a disability and their political rights and their rights to sports and entertainment.

With thanks to Dr. Bahieldin HZ Elibrachy and Mag. Mona O. Abdel Hafiz of Ibrachy & Dermarkar Law Firm for their invaluable collaboration on this update.


Image: Suzanne Horne
Suzanne Horne
Partner, Employment Law Department

Image: Kirsty Devine
Kirsty Devine
Associate, Employment Law Department

Image: Aashna Parekh
Aashna Parekh
Associate, Employment Law Department

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