Global HR Compliance in Egypt
Employment in Egypt is governed by Labour Law No. 12 of 2003 and its amendments. The legal framework imposes detailed procedural obligations on employers, especially concerning termination, working time, leave entitlements, and protections for certain classes of employees. Missteps around dismissal, overtime pay, or contract classification can result in costly litigation and reputational damage. For international businesses hiring locally or relocating staff into Egypt, compliance risk centres on documentation, severance interpretation, and procedural adherence. Understanding the operational requirements is essential for lawful engagement.
This guide provides a structured, fact-based overview of Egypt’s employment rules, written specifically for legal and HR teams responsible for cross-border workforce management.
Hiring and Firing Workforce in Egypt
Employment Agreements
Egyptian labour law recognises both indefinite and fixed-term employment contracts. An indefinite contract establishes an ongoing employment relationship with no end date, while fixed-term contracts must not exceed five continuous years with the same employer. A casual employment arrangement is permitted only for work outside the employer’s usual scope and may not exceed six months within a calendar year.
Employment contracts must be written in Arabic and signed by both parties. They must detail the nature of work, remuneration, working hours, and terms of termination. In practice, employers often supplement the statutory contract with internal regulations or collective agreements, which may become enforceable if consistently applied.
Probation Period
The probation period must be stated in the employment contract and cannot exceed three months. Reappointment on probation with the same employer is not permitted. During this period, either party may terminate the contract without severance, provided all documentation is correctly issued and registered.
Working Hours and Overtime
The statutory workweek is capped at 48 hours, with a daily maximum of 8 working hours. Employees must receive at least one day of rest per week. Overtime is permitted up to a daily maximum of 10 total working hours and must be compensated. The minimum overtime pay rate is 135% of the standard rate for daytime hours and 170% for night-time hours. Work performed on designated rest days requires either double pay or compensatory time off in the following week.
Annual Leave
Employees who have completed one year of service are entitled to 21 working days of annual leave. This increases to 30 working days after ten years of continuous service or upon reaching age 50. Official holidays are not counted toward annual leave. Employees who refuse leave in writing are deemed to have waived their right to payout in lieu.
Sick Leave
Sick leave is subject to verification by a certified medical authority. Employees are entitled to paid leave for up to 180 days per illness. For the first 90 days, they receive 75% of their insured wage, increasing to 85% for the remainder. These payments are governed by the Social Insurance Law, and employers must coordinate with the relevant fund to ensure correct disbursement.
Parental Leave
Female employees with at least ten months of service are entitled to 90 calendar days of fully paid maternity leave, including pre-birth absence. This leave may be taken up to three times during the course of employment. In establishments employing 50 or more workers, women may also take up to two years of unpaid leave per child, for a maximum of two children. The law does not mandate paternity leave.
Termination of Employment
Termination of indefinite contracts by the employee requires a valid reason related to health, social, or economic circumstances. Termination by the employer is heavily regulated and generally not permitted unless the employee has committed a grave fault. Grounds considered sufficiently serious include repeated unauthorised absence, intoxication during work hours, criminal assault in the workplace, or breach of confidentiality.
Dismissal procedures must follow formal written warning protocols. For unauthorised absence, an employer must issue written warnings after 10 non-consecutive or 5 consecutive days. All warnings must be documented and delivered by registered letter with proof of receipt.
Fixed-term contracts may be terminated only for cause unless both parties agree otherwise. Otherwise, early termination by the employer without fault entitles the employee to the remaining salary for the contract’s duration.
Notice Periods
Notice requirements depend on tenure. For employment under ten years, the notice period is two months. For service exceeding ten years, it increases to three months. Notice must be provided in writing by either party, and failure to observe these periods may expose the employer to compensation claims.
Severance Pay
The law does not require severance except under specific conditions. Employees who work past retirement age are entitled to severance. Severance must also be paid if stated explicitly in the employment contract or has become an acquired right through consistent practice over five years. In such cases, it must apply equally to all employees or to a defined category within the workforce.
Severance is not payable for lawful termination due to grave fault or during probation unless otherwise agreed. Employers are advised to maintain documented internal policy defining severance triggers and calculations.
Mandatory Benefits and Contributions
Employers must comply with the national minimum wage set by the National Council for Wages, although enforcement in the private sector is uneven. Benefits include paid public holidays, sick leave, annual leave, and maternity leave. Social insurance contributions are mandatory and cover pensions, work injury, unemployment, and healthcare. Contributions must be declared and paid monthly, and failure to do so results in interest charges and penalties.
Other benefits, including pilgrimage leave or educational assistance, are not mandated but may become enforceable if established as a contractual or customary right.
Acumen International: Global Employment Services in Egypt
Acumen International enables foreign companies to legally engage personnel in Egypt without registering a local entity. We serve as the employer of record, executing local contracts that comply with Egyptian labour and tax legislation. Our infrastructure covers all essential compliance layers including payroll, benefits, statutory contributions, and labour authority registration.
Practical Employment Execution
We draft compliant employment contracts in Arabic, ensure proper registration with Egyptian authorities, and manage monthly payroll in local currency.
Our Global Employer of Record services include direct handling of tax declarations, social insurance submissions, and coordination with government healthcare and pension offices. Contracts are executed under the correct employment classification to avoid miscategorisation risk, particularly in sales, technical, and field-based roles.
Legal Risk Containment
We assume legal responsibility for the employment relationship. This includes managing lawful onboarding, contract enforcement, and lawful terminations aligned with Egyptian Labour Law. In cases of employee dismissal, we handle the required documentation and procedural steps, including warnings, notice, and final settlement. Our role protects clients from penalties tied to unlawful dismissal or employee disputes.
In-Country Continuity and Local Access
Our presence in Egypt provides operational continuity for clients expanding gradually or managing limited headcount. We support both long-term employees and temporary assignments, and can adjust contract terms for variable duration or limited-scope engagements.
This allows clients to run a compliant payroll and employment model while delaying full entity setup or avoiding it altogether.
When to Use
Our services are used by companies building presence in Egypt through sales, client support, or strategic partnerships, as well as by multinationals hiring local or returning Egyptian nationals. We are also engaged for high-risk compliance scenarios where tax, immigration, and labour exposure must be controlled precisely.