After years of anticipation, the Egyptian Parliament’s House of Representatives has officially passed a new Labour Law (“New Labour Law”), marking a significant overhaul of the country’s labour regulations. The long-anticipated legislation introduces key reforms aimed at modernizing employment relations and aligning Egypt’s labour market with international standards. The New Labour Law is bound to replace the longstanding Labour Law no. 12 of 2003 (“Old Labour Law”) which is anticipated to remain in effect for a minimum of 90 days following the issuance of the New Labour Law. Full implementation will require the publication of the New Labour Law in the Official Gazette. Below are some of the reported new features under the New Labour Law.

Applicability:

The New Labour Law does not apply to public-sector employees, except in specified circumstances. It also explicitly excludes domestic (household) workers, who will instead be subject to a forthcoming tailored legislation. Additionally, workers in free zones and investment zones remain subject to their existing regulatory frameworks.

Key Provisions of the New Labour Law:

Rules of Wage Adjustments

Annual raises are now set at a minimum of 3% of the insured wage, replacing the previous 7% of base salary standard, triggered only upon one full year of employment. Employers facing financial hardship may petition the National Wages Council for a reduction or exemption.

Employment Contract Terms, Probation Periods, and Formalities

Under the New Labour Law, indefinite-term employment contracts shall be the default employment arrangement unless a fixed term is explicitly agreed in writing. Moreover, the employment contracts are deemed indefinite if unwritten or if work continues post-expiry without renewal. For probation periods, the New Labour Law maintains a 3-months’ probation period and may not be imposed more than once. Employees who receive employer-funded training must complete a specified tenure or reimburse costs upon early departure.

Moreover, Employment contracts must be drafted in Arabic and issued in four copies; for the employer, the employee, the Social Insurance Office, and relevant administrative authority, though the latter is yet to be clarified. Non-Arabic speakers shall be issued a translated version of their contract, but the Arabic text shall prevail in cases of Labour disputes.

Working Hours, Overtime, and Modern Labour Arrangements

Working hours are set to a maximum of 8 hours daily or 48 hours weekly, excluding mandatory 1+ hour of breaks (with no more than 5 continuous work hours). The minimum overtime pay is now set at 35% (daytime) and 70% (nighttime), and if an employee works on their weekly day-off they would be entitled to double pay for that day and a compensatory leave in the successive week.

The New Labour Law now formally recognises remote work (work from home), part-time roles, flexible hours, and job-sharing. Employees may also work for multiple employers, provided confidentiality obligations are upheld and freelancing does not conflict with primary employment.

Foreign Labour Regulations

The Labour Minister may set quotas for foreign workers and restrict non-Egyptians from specific sectors. A work permit system will cover select foreign investors without residency. Work permit fees now range from EGP 5,000 to EGP 150,000. Moreover, employers must report foreign workers absent for more than 15 consecutive days without justification.

Leave Entitlement and Parental Protection

Paid leave is now rationed as follows; (i) 15 days of leave for employees in their first year, (ii) 21 days starting from their second year, and (iii) 30 days after completing 10 years of service or reaching the age of 50. Moreover, employees with disabilities are entitled to 45 days of leave annually. Non-muslim employees are entitled to leave for religious holidays along with national holidays.

In terms of parental protection for working parents, the New Labour Law sets a paid maternity leave of 4 months that includes at least 45 days of post-birth with no requirement of minimum prior service period, with termination of employment being prohibited during maternity leave by the employer. Fathers, on the other hand, are entitled to a paternity leave of 1 paid emergency day during a child’s birth, per child (up to 3 children), separate from their annual leaves.

The New Labour Law introduces a childcare mandate requiring companies with more than 100 female employees to provide on-site daycare or subsidize such costs (which details are to be set by relevant ministries).

Labour Dispute Resolution

A key organ under the New Labour Law, the specialized labour courts and appellate chambers, are to commence operations by 1 October 2025. The New Law also introduces an urgent matters judge for expedited rulings with the Court of Cassation now hearing substantive labour appeals. Moreover, a newly established mediation and arbitration center is introduced for ruling on collective labour disputes.

Additional Features:

The New Labour Law eases financial burdens by exempting workers from court fees and streamlining litigation, while tying Training Fund contributions to insured wages (0.25% of minimum wage, or EGP 10–30 annually) and granting full exemptions for employers with in-house training programs.

Strike actions are now tightly regulated, requiring advance union notice and banned in essential services, with no wage obligations during strikes.

Crucially, worker claims now take absolute priority in liquidations even over legal fees—while mergers or acquisitions no longer automatically terminate employment contracts.

Stay tuned for our practical notes on the application of the Law!

Authors: Hegui Taha, Partner and Khaled Al Khashab, Associate