Ultimate Guide to Egypt Labor Laws for Startups

Starting a business in Egypt? Understanding labor laws is critical to avoid penalties, build trust, and attract top talent. Here’s what you need to know:

Contracts: Must be in Arabic (bilingual allowed) and include job details, salary, and benefits.
Work Hours: Max 48 hours/week; overtime at 135% (day) or 170% (night).
Employee Benefits: 21 days annual leave, 90 days maternity leave, and severance pay.
Hiring Foreign Employees: Requires permits and adherence to quotas.
Penalties: Fines for violations range from EGP 1,000 to EGP 5,000,000.

Stay compliant by keeping records, conducting regular audits, and staying updated on legal changes. Compliance isn’t just about avoiding fines – it’s key to long-term success.

Employment Contract Termination – Egyptian Labor Law

Employment Contracts in Egypt

Egyptian labor law mandates detailed written contracts to safeguard both employers and employees. For startups, understanding these rules is essential to establish compliant employment relationships.

Legal Requirements for Employment Contracts

Employment contracts in Egypt must be written in Arabic, though bilingual versions are allowed for international startups ^[2]. This ensures the contracts are legally valid and clear in Egyptian courts.

Key elements that must be included in employment contracts are:

Contract Element	Details Required
Basic Details	Names, addresses, and positions of both employer and employee
Compensation	Base salary, bonuses, and benefits
Work Terms	Hours, location, and job responsibilities
Duration	Whether the contract is fixed-term or indefinite
Benefits	Leave policies, insurance, and other entitlements

Types of Contracts

Egyptian law provides two primary types of employment contracts, each suited to different business needs:

1. Indefinite Term Contracts
These contracts do not have a set end date and are commonly used for permanent roles. They provide employees with the highest level of job stability and are ideal for long-term team members.

2. Fixed-Term Contracts
These contracts are limited to a duration of up to 5 years and can be renewed. They are well-suited for project-based roles, seasonal jobs, or temporary positions ^[2].

Startups are also allowed a 3-month probationary period to assess an employee’s performance and fit with the company ^[2].

Termination of contracts requires a notice period of 2–3 months, as specified in the agreement. Employers may also opt to provide payment instead of notice ^[2]^[4].

For international startups, hiring foreign employees comes with additional considerations, such as quota limits and specific salary requirements. These must be carefully reviewed during the recruitment process ^[1].

Hiring and Onboarding in Egypt

Legal Steps for Hiring

To legally hire employees in Egypt, startups must first register with the Ministry of Manpower and Immigration to establish themselves as employers.

For hiring foreign employees, obtaining work permits is crucial. The process includes:

Requirement	Details
Documentation	Employee passport, employment contract copy
Validity	One year, renewable
Processing Authority	Ministry of Manpower and Immigration
Company Requirements	Proof of registration, banking documentation

Additionally, businesses are required to set up a banking account to ensure payroll transparency and compliance with regulations ^[1].

Once these legal steps are complete, startups can focus on creating a hiring process that aligns with local labor laws.

Efficient Hiring Process

A well-structured hiring process ensures both compliance and operational efficiency. Here’s how startups can approach recruitment:

Job Posting and Candidate Selection
Clearly outline job roles, responsibilities, and compensation when advertising positions ^[4].

Interview and Assessment
Employers can use the three-month probation period to evaluate new hires while staying compliant with labor laws ^[2].

Documentation Requirements

Detailed job descriptions
Defined compensation structure
Working hours (limited to 48 hours per week) ^[2]
Overtime pay rates (135% for day shifts, 170% for night shifts) ^[2]

Employees in Egypt are entitled to fair wages, safe working conditions, protection from discrimination, and benefits like annual leave and maternity leave ^[1]^[2].

To ensure smooth compliance, many startups in Egypt collaborate with employment law firms such as Consortio Law Firm, which provide guidance on navigating labor regulations ^[3]. By adhering to these guidelines, startups can reduce risks and establish a legally compliant workplace.

After implementing a compliant hiring process, it’s essential for startups to stay informed about their ongoing obligations to employees under Egyptian labor laws.

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Employee Rights and Employer Duties

Work Hours, Overtime, and Leave

In Egypt, the standard workweek is 48 hours, broken into 8-hour daily shifts. Overtime is limited to 2 hours per day and must be compensated at 135% of base pay for daytime hours and 170% for night shifts. Additionally, women and minors (ages 14-18) are prohibited from working between 7 PM and 7 AM ^[2].

Time Period	Overtime Rate	Maximum Daily Overtime
Daytime Hours	135% of base pay	2 hours
Night Shifts	170% of base pay	2 hours
Total Daily Hours	Cannot exceed 10 hours (including overtime)	–

Employees are entitled to several benefits, including 21 days of annual leave, 90 days of maternity leave, and a mandatory 1-hour break after 5 continuous working hours. They must also receive a weekly rest day after six consecutive workdays ^[1]^[2].

Probation and Termination

For startups, having clear termination procedures is critical for staying legally compliant and managing workforce dynamics. Here are the key requirements:

Requirement	Details
Notice Period	2-3 months
Severance/End of Service Benefits	2 months’ salary per year (3 months after 10 years of service)

Termination is permissible under specific conditions such as:

Lack of professional competence
Safety violations
Extended absences without authorization
Breach of contract terms ^[2]

Non-compliance with these laws can result in penalties ranging from EGP 1,000 to EGP 5,000 per employee for minimum wage violations, and up to EGP 5,000,000 for severe infractions ^[1].

Employment contracts must include the following details:

Employer and workplace information
Contract duration
Job description
Compensation structure
Employee benefits ^[2]

Adhering to these regulations helps startups avoid costly penalties and create a legally compliant work environment. The next section will delve into practical tips for maintaining compliance.

Compliance Tips for Startups in Egypt

Using HR Resources

Navigating labor law compliance can be tricky for startups. Here’s a quick breakdown of HR management options:

HR Management Option	Best For
In-house HR Manager	Startups with solid funding and 20+ employees
Outsourced HR Services	Early-stage startups or those with limited budgets

To stay compliant, startups should focus on these key HR practices:

Keep Documents Organized: Store contracts, attendance, and leave records digitally to avoid disputes and ensure compliance.
Schedule Regular Audits: Review contracts, working hours, overtime, and leave policies every quarter.
Educate Employees: Provide regular training on employee rights and workplace obligations to prevent violations.

Good HR management not only ensures compliance but also helps startups run smoothly. However, staying informed about labor law changes is just as important.

Keeping Up with Legal Changes

Egyptian labor laws, primarily outlined in Law 12 of 2003 (amended by Law 180 of 2008), are subject to updates that can directly affect payroll, hiring, and employee management. Startups need to monitor these updates closely.

Here are some key compliance areas to watch:

Compliance Area	Monitoring Frequency	Penalties for Non-compliance
Minimum Wage Standards	Quarterly	EGP 1,000–5,000 per employee
Data Protection Rules	Monthly	Up to EGP 5,000,000
Working Hours & Overtime	Weekly	Penalties vary by violation type

To stay informed, startups can:

Subscribe to updates from the Egyptian Ministry of Manpower.
Work with local legal consultants who specialize in labor law.
Join industry associations that share regulatory updates.
Use HR compliance software that sends notifications about changes.

Building a Compliant Workplace in Egypt

Creating a workplace that adheres to regulations in Egypt means balancing legal requirements with day-to-day business operations. Staying compliant helps businesses avoid fines and build a solid foundation for growth.

For startups navigating Egypt’s changing business environment, here are some key compliance areas to focus on:

Compliance Area	Impact on Business	Potential Cost of Non-Compliance
Minimum Wage Standards	Improves employee satisfaction	EGP 1,000-5,000 per employee
Data Protection	Builds trust and protects reputation	Up to EGP 5,000,000
Working Hours	Ensures productivity and legal safety	Variable penalties

"Knowing how to expand efficiently and effectively and being able to navigate the complexities of Egyptian labor law remain key issues for responsible employers" ^[2]

Egypt’s Vision 2030 and the New Investment Law have introduced both opportunities and new compliance responsibilities for startups. Key focus areas include:

Keeping detailed and accurate employment records
Setting up effective HR systems
Regularly updating workplace policies
Prioritizing employee training and development

These measures not only ensure compliance but also offer incentives for businesses that align with labor laws. Startups must stay vigilant, as compliance is an ongoing process. Regular checks and updates to policies can help avoid penalties and build a workplace that supports long-term growth.

FAQs

Here’s a quick guide to frequently asked questions about Egyptian labor laws, focusing on essential points that startups need to know.

What are the labor laws in Egypt?

Egypt’s labor laws are mainly governed by Law No. 12 of 2003, which lays out employment rules in detail. Below are some key requirements as of January 2025:

Requirement	Details	Source Law
Working Hours & Overtime	Max 48 hours/week; Overtime at 135% (day), 170% (night)	Law 12/2003
Minimum Wage	EGP 6,000/month (private sector)	Current Standard
Leave Entitlements	21 working days annual leave, 90 days maternity leave	Law 12/2003

Employment contracts should:

Be written in Arabic (bilingual versions are acceptable).
Include essential details like employer info, job role, pay, benefits, and working conditions.

Penalties for non-compliance vary, such as fines between EGP 1,000–5,000 per employee for wage violations and up to EGP 5,000,000 for data breaches ^[1].

For rules on terminations, including notice periods and severance, check the ‘Employee Rights’ section. Keeping detailed records and regularly updating workplace policies is crucial to staying compliant with these laws.