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Sunday, 6 March 2022

Need an exemption from the minimum wage? Prove you really need it.

SMART POLICY- Companies need to cough up lots of info before they can qualify for an exemption to the new national minimum wage. The National Council for Wages (NCW) has not yet started reviewing the 6k requests companies have filed for exemptions from the new private sector minimum wage, Manpower Minister Mohamed Saafan said in a statement Friday. None of the companies have submitted financial statements, leaving the council unable to assess the potential losses caused by the wage hike, the minister said.

What qualifies a company for exemption? Firms requesting exemptions are required to present proof that they will incur losses or other evidence that their industry has faced disruptions, head of the NCW’s complaints committee Abdelhamid Belal told Enterprise. Officials will subsequently visit the companies to verify the evidence, he added.

WE DON’T LIKE EXEMPTIONS. Sorry to be hard(redacted) about this, but we hate the idea that any company or industry should get anything more than a passing exemption from the minimum wage. We have a duty to our people to pay living wages — and the minimum wage barely meets that threshold. If your industry or company can’t afford to do that, you need to go back to the drawing board.

Companies that receive exemptions will get a one-year grace period before authorities revisit their status, Manpower Ministry spokesman Haitham Saad El Din told us. Companies that are eventually found to be ineligible for an exemption could be slapped with a retroactive fine for not raising salaries in line with the new minimum wage, he added, without disclosing the amount they would be required to pay.

The NCW will finish reviewing applications by the end of March, Belal said, after which the Manpower Ministry and NCW will meet to make a final decision on which companies will be exempted.

Background: Thousands of companies have been handed a temporary reprieve from implementing the new EGP 2.4k minimum wage that came into effect at the start of the year, while the government decides whether to grant their requests for exemptions. The firms claim that high employment counts, increased production costs, and the pandemic have left them unable to pay for the additional labor costs. We’d previously been told to expect rulings on a case-by-case basis by mid-February.

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