Employer Action Code: Act
After many years of debate, the long-awaited new Labor Law has been approved by Egypt’s House of Representatives and signed by the president; it was published in the Official Gazette on May 3, 2025. The law, aimed at modernizing employment practices and aligning with international labor standards, will replace the 2003 Labor Law as of September 1, 2025.
Key details
Notable aspects of the new Labor Law include:
- A new end-of-service benefit equal to one month’s pay per year of service will be payable by employers upon the termination of fixed-term employment contracts where the total duration of fixed-term employment is five years or more
- The existing requirement for annual pay increases of at least 3% of covered pay under Decree No. 57 of 2021 has been incorporated into the new Labor Law
- Maternity leave will increase from 90 to 120 calendar days and may be taken up to three (rather than two) times in a career
- A new paternity leave entitlement will be introduced of one day of employer-paid leave for up to three children
- Employees will be entitled to 15 workdays of employer-paid leave in the first year of service (currently eligible only after six months of work, pro rata based on 21 workdays); individuals with disabilities will be entitled to 45 days of paid leave per year
- Pay replacement benefits from social security for sick leave will be three months at 100% pay, 85% for the next six months and 75% for the last three months (compared with 75% of pay for the first 90 days and 85% for the next 90 days under the 2003 law)
- Employers with 30 or more workers will be required to contribute 0.25% of monthly wages, subject to a minimum contribution of 10 Egyptian pounds (E£) and a maximum of E£30 per employee, to a central training fund. Employers providing in-house training programs may apply for an exemption. This training contribution replaces the prior one based on 1% of net profits, for companies with 10 or more employees
- The notice period for termination of indefinite-term employment contracts will be three months, regardless of length of service
- Employee resignations will have to be ratified by the competent administrative authority in order to be valid and may be retracted within 10 days
- Labor courts responsible for employment disputes will be established, with a target date for starting operations of October 1, 2025
In addition, the law formally recognizes working arrangements such as remote work, part-time work, flexible hours and job sharing. It also states the principle of equal pay for work of equal value and introduces provisions to address harassment in the workplace.
Employer Implications
Implementing regulations for the new Labor Law are expected to be issued by September 1, 2025. Like the 2003 law, certain provisions are somewhat general and will be elaborated on by regulations, official guidance and the court system. Companies should consult with legal counsel on the various changes and consider any updates needed to their policies and practices. For employers with fixed-term employees, the new end-of-service benefit may give rise to defined benefit liabilities.
