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Monday, 2 January 2023

Private-sector minimum wage rises 12.5%

New year, new private-sector minimum wage: The National Council for Wages has raised the minimum wage for private-sector workers by 12.5% amid soaring inflation. In a statement Thursday, the Planning Ministry said that private-sector firms now have to pay their employees at least EGP 2.7k a month, up from EGP 2.4k previously. The new minimum came into effect yesterday with the start of the new year.

The council was aiming for a bigger hike: The council was hoping to raise the minimum wage to EGP 3k — to match the minimum wage for civil servants and employees at state-owned enterprises as of November — following talks with business leaders.

New rules for annual bonuses: As of their 2023 financial years, private-sector companies will have to disburse annual bonuses equal to at least 3% of the employee’s ins. contribution and no less than EGP 100, after the council agreed to set a minimum value for annual bonuses.

The minimum wage hike is the latest in a series of measures carried out by the government to soften the impact of the economic crisis. Two major currency devaluations have helped to push inflation to near five-year highs, putting pressure on low-income households. The government has hiked the public-sector minimum wage to EGP 3k, expanded the Takaful and Karama social security program, and frozen household electricity prices until the end of the fiscal year in June.

The private-sector minimum wage is relatively new in Egypt, having been introduced at the beginning of FY 2021-2022 at EGP 2.4k a month. The move was met with push back from companies, who complained that they couldn’t afford the higher wage bill.

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