After lengthy deliberation, the Senate adopted the new Egyptian Labor Law in February. The bill still has to pass the lawmakers’ approbation in the House of Representatives, which should take place during the second semester of 2022, boosting a stalled process. This article elaborates on some of these policies and their implications for senior HR management officials.
The future law will align the Supreme Constitutional Court’s new rules with the International Labor Organization’s (ILO) regulations. As for now, it contains several amendments to the older law that consider both the current economic context and the Egyptian workforce’s working conditions. The changes impact many HR functions, including insourcing, recruitment, leave policies, wage decisions, and dismissals.
The importance of the new Egyptian labor law:
The 2022 Labor Law in Egypt aims to protect the rights of individuals who compose the country’s workforce. It also ensures employers are treated justly and encouraged to comply with the rules and regulations with a welcoming attitude. Specific issues gain precedence over others in importance as they affect most individuals from marginalized communities.
The Law will address the following cases:
- Gender-specific regulations
- Maternity and paternity leave for new parents
- Worker dismissal rules and regulations – employee protection against sudden firings
- Regulations regarding the appropriate number of working hours
- Rules regarding child labor
- The minimum payable wage for a low-level employee
- Maximum pay ranges
- On-time payment of employees
- Labor lawsuits
- Pensions and social insurance
Impact of the Labor Law on HR Managers and Directors
Specific stipulations laid out by the coming Labor Law, directly and indirectly, affect HR personnel at high positions within organizations. We discuss some of the more important articles and amendments below:
Impact on Payroll Managers
STATEMENT OF THE NUMBER OF EMPLOYEES
According to an article that Law will enact, employers must submit an official statement with a workforce breakdown. They must state the number of individuals employed by the organization and the number of differently-abled persons in the workforce. If the organization’s HR department fails to provide this information, they can face a fine between EGP 100,000 and EGP 300,000. Thus, it has become necessary for higher HR management to ensure accurate recruitment records are maintained and accessible at all times.
PAYMENT OF EMPLOYEES
The Labor Law is in place to protect employees of the Egyptian workforce. The lawmakers have amended Article 253 to declare a hefty punishment for employers who do not pay their workers’ wages. The penalty is a fine lying between EGP 20,000 and EGP 50,000. Since the HR department is responsible for paying salaries to the workforce and maintaining records, Egyptian companies’ HR managers and directors must ensure that employee payouts go out on time.
MINIMUM WAGE REQUIREMENTS
HR professionals are responsible for drafting and sharing salary package specifics with candidates when conducting insourcing and recruitment functions. HR managers working in private-sector companies must ensure that the compensation package offered to any employee is higher than the minimum wage laid out by the Law – EGP 2,400 since Jan 1, 2022. Failing to pay employees this amount will land the company in trouble.
Impact on HR Directors
MATERNITY AND PATERNITY LEAVE
Under the new Law, new fathers are allowed to take one day off following the birth of their child. This paid day off is granted to employees when they present the child’s birth certificate.
The Law also lays out four months of paid maternity leave (previously three months) for new mothers, which they can avail up to three times in their careers. Female workers of companies with more than 25 employees (once 50 employees) can also take up to two years of unpaid leave. Responsibility for financing the compensation for wages while on maternity leave is split between the social insurance scheme (75%) and the employer (25%).
HR professionals must facilitate employees’ maternity and paternity leave process during the leave application. Keeping records of employees’ other time off requirements, including sick and paid annual leave, is also essential for HR managers.
DISMISSALS
The Law protects employees from automatic dismissal for improper reasons such as illness. In such cases, the employer would require an order from a labor court before firing a worker. However, this ruling does not apply for legitimate reasons, in addition to the eight severe violations named in the current labor law listed below:
- impersonating another person or submitting forged documents,
- long unjustified absences,
- repeatedly ignoring safety guidelines,
- revealing secrets that harm the business,
- competing with the business owner in the same industry,
- physically assaulting the business owner or any superiors,
- being under the influence of drugs during work hours.
Human Resources professionals must justify the reasons for dismissal, providing clear and objective documentation of the alleged facts.
RIGHT TO STRIKE
The Senate also approved the articles about employees’ right to protest peacefully when confronted with a labor rights issue. While employees must exhaust other avenues of highlighting their concerns before they strike, they still have the right to do so. However, they must inform the relevant departments ten days before the strike, specifying the reasons for the protest. In this situation, once notified about the prospective strike, higher-level HR management can step in and try to resolve the matter through dialogue with the employees.
Impact on Recruiters
MINIMUM AGE OF EMPLOYEES
Ensuring employees meet the minimum age requirement is essential to the HR department’s operations. Organizations, under the Labor Law, are not allowed to hire children under the age of 18. However, they train underaged people for up to six hours per day.
CONCLUSION
Introducing the new Egyptian Labor Law is pivotal to enhancing workplace fairness and compliance with international labor standards. It brings significant changes affecting HR management, from recruitment and wage decisions to leave policies and dismissals, aiming to protect employees’ rights and promote a balanced employer-employee relationship.
For HR professionals, adapting to these changes is crucial. The law emphasizes the importance of maintaining accurate records, ensuring timely wage payments, and complying with specific regulations, including gender equality, child labor, and employee dismissals.
NAOS Talents supports HR managers and directors across Egypt and the MENA region, whether you’re looking to insource or outsource employees or need assistance with payroll or recruitment. Our expertise in navigating the complexities of the new labor law will help your organization remain compliant and competitive. Contact NAOS Talents for expert guidance and support in adapting to these legal requirements, ensuring a smooth transition for your business and workforce.
