Executive summary

Labor Law No. 14 of 2025 (New Labor Law) is effective from 1 September 2025 and in force for labor disputes starting from 1 October 2025. The Egyptian government enacted the New Labor Law on 3 May 2025 and published the text on the Ministry of Labor website. It has been introduced as part of a comprehensive reform package to enhance the working relationship between employers and employees.

Detailed discussion

Background

The New Labor Law introduces key reforms designed to enhance workers' rights, clarify employer obligations and adapt to modern work patterns. It reflects Egypt's commitment to international labor standards and aims to foster a conducive business environment.

The previous Labor Law No. 12 of 2003 established the foundational framework for labor relations in Egypt, focusing on workers' rights and employers' responsibilities. Law No. 125 of 2010 further amended these provisions, but many aspects became outdated, necessitating a comprehensive review and reform to meet contemporary labor market needs.

The old Labor Law remains in force for 90 days following the 3 May 2025 enactment of the New Labor Law, allowing both employers and employees time to adjust to the new legal framework. The New Labor Law will become enforceable starting from the first day of the month following the completion of the 90 days, i.e., on 1 September 2025.

Highlights of the New Labor Law

The New Labor Law introduces several changes significant to the employment and payroll landscape in Egypt, including the following:

1. Statutory annual salary increment: Employers are required to provide an annual salary increment with at least 3% of the social insured salary, with provisions for temporary exemptions for those eligible.
2. New work patterns: The New Labor Law expands the definition of employment relationships to include new work-pattern arrangements such as remote work, part-time work, flexible work arrangements and job sharing.
3. Annual employee data submission: Employers must submit a detailed statement to the relevant authorities within 30 days of the New Labor Law's effective date, including employee data and salaries. Employers must update this statement every January to report any changes.
4. Training fund contribution: Employers are now required to contribute 0.25% of the minimum social insured salary per employee to the training fund, with a minimum of 10 Egyptian Pounds (EGP10) and a maximum of EGP30. This replaces the previous law's requirement of 1% of the net profits.
5. Employment contract: The employer should prepare the employment contract in writing in Arabic in four copies, with one copy each retained by the employer, the employee, the competent social insurance office and the relevant administrative authority. If the worker is a non-national and does not speak Arabic, the employment contract may be prepared in Arabic and the employee's language.
6. Limited-term contract termination: If an employer terminates a limited-term contract, the employee is entitled to one month's salary for each year of service.
7. Notice period update: The notice period for resignations is updated to three months, instead of two months as per the previous law, allowing for better planning and transition for both employees and employers.
8. Maternity leave: Employed women are entitled to be paid for four months of maternity leave, instead of three months as per the previous law, without restrictions on their length of service, with the possibility of using this leave up to three times during their employment.
9. Childcare leave: The New Labor Law allows employed women who have completed at least one year of service working in establishments with 50 or more employees to unpaid childcare leave for up to two years, a maximum of three times, instead of twice as per the previous law.
10. Annual leave: Employees are entitled to 15 working days of annual leave during their first year of service, increasing to 21 days. Thereafter, those who have completed 10 full years at service are entitled to 30 days of leave. Additionally, disabled employees are entitled to 45 days of annual leave from the time of starting employment.
11. Paternity leave: The New Labor Law introduces paternity leave, allowing male employees to take leave on their child's day of birth, up to three times during their employment, without it counting against their annual leave.
12. Study leave: Employees have the right to determine the date of their annual leave if preparing for an exam while pursuing a nonprofessional qualification, provided that they notify the employer at least 15 days before taking the leave. Employees also have the right to obtain study leave with pay for the actual days of the exam, which will not count against their annual leave balance, provided that the employer has been notified at least 10 days before the leave period. Proof of attendance at the exam must also be provided.
13. Sick leave for industrial activity: Sick leave policies are now revised specifically for industrial activities, ensuring adequate support for workers in physically demanding roles.
14. Resignation process: Employers must respond to employee resignations within 10 days, and the competent administrative authority must ratify the resignations.
15. Retention requirement: The retention requirement for employee files has been extended to five years following the termination date of the employee.
16. Non-national employees: A non-national employee is not permitted to work in the country before obtaining a license from the relevant ministry and being authorized to enter and reside in the country for the purpose of work. Employers are not allowed to employ non-nationals without obtaining this license.

Implications

Employers and employees should carefully review the provisions of the New Labor Law to assess their rights and obligations. Compliance with the new regulations is crucial to avoid penalties and ensure a smooth transition to the updated legal framework.