February 14, 2025

First Meeting of Egypt’s National Wages Council: Key Decisions and Outcomes

Introduction

On February 9, 2025, the National Wages Council (Council) held its first meeting under the leadership of Dr. Rania Al-Mashat, Minister of Planning and Economic Development and International Cooperation. This meeting was convened in response to directives from President Abdel Fattah El-Sisi, aiming to address economic changes and their impact on the labor market. The council made several significant decisions to enhance social justice and improve living standards for workers in the private sector.

Economic Indicators and Labor Market Overview

During the meeting, Dr. Rania Al-Mashat presented key economic growth indicators, highlighting positive developments in the last quarter of the fiscal year 2023/2024 and the first quarter of the current fiscal year 2024/2025. The manufacturing sector, particularly non-petroleum industries, showed a significant turnaround from contraction to growth. The industrial production index improved after a series of declines since the third quarter of the fiscal year 2021/2022. Private sector investments also surged, accounting for 63% of total investments in the first quarter of the current fiscal year. The Purchasing Managers’ Index (PMI) for January 2025 recorded its best performance in four years, reaching 50 points, indicating a move beyond the neutral zone.

Decisions and Announcements

  1. Minimum Wage Increase The council decided to raise the minimum wage for private sector workers from 6,000 EGP to 7,000 EGP, effective March 1, 2025. This decision aligns with the council’s commitment to social justice and improving living standards in light of current economic conditions.
  2. Annual Allowance The council set the annual allowance for private sector workers at a minimum of 3% of the insurance subscription wage, with a minimum of 250 EGP per month.
  3. Minimum Wage for Part-Time Work For the first time, the council established a minimum wage for part-time work, ensuring that part-time workers earn no less than 28 EGP per hour, in accordance with international practices and the definition provided in the labor law.

Rationale and Implementation

Dr. Rania Al-Mashat emphasized that the increase in the minimum wage is part of the government’s efforts to respond to current economic developments, thereby enhancing economic and social stability. This move is consistent with international standards, as the International Labor Organization (ILO) advocates for periodic reviews of minimum wages to protect the purchasing power of families and accommodate gradual economic changes.

Minister of Labor, Mr. Mohamed Gibran, highlighted that this decision is in line with President Abdel Fattah El-Sisi’s directives to strengthen social protection and improve workers’ living standards. He noted that the annual allowance of at least 250 EGP would help improve workers’ income and secure their rights amid economic changes.

The Ministry of Labor will issue a circular to labor directorates across all governorates, detailing the executive rules and mechanisms for monitoring the implementation of this decision in various establishments. According to the Global Wage Report 2020-2021 by the ILO, 90% of member countries have a minimum wage system in place, recognizing it as a globally accepted tool for protecting low-income workers’ wages.

For more information about the decisions and its implication on your entity, please feel free to contact Dr. Eman Riad.

Authors

Get in Touch

Related posts

Subscribe to our Newsletter

Subscribe to Receive Legal Updates