Employer of Record Guide in 

Egypt

Vacation Leave

• Standard Entitlement: 21 days of paid annual leave after completing one year of service
• Increased Entitlement: 30 days after 10 years of continuous service
• Accrual: Leave accrues monthly at 1.75 days per month
• Payout Rules: Unused vacation must be paid out upon termination
• Timing: Employer and employee must agree on vacation timing

Sick Leave

• Paid Sick Leave: Up to 180 days per year at full pay for the first 90 days, then 75% pay for the remaining 90 days
• Medical Certification: Required for absences exceeding 3 consecutive days
• Chronic Illness: Special provisions for employees with chronic conditions
• Occupational Injury: Full pay for work-related injuries with no time limit

Maternity Leave

• Duration: 90 days (3 months) of fully paid leave
• Timing: Can be taken before and/or after childbirth
• Job Protection: Guaranteed return to the same position
• Nursing Breaks: Two 30-minute breaks daily for nursing mothers for up to 18 months

Paternity Leave

• Duration: 3 days of paid leave following the birth of a child
• Timing: Must be taken within one week of birth
• Documentation: Birth certificate required

Bereavement Leave

• Immediate Family: 3 days of paid leave for death of spouse, parent, or child
• Extended Family: 1 day for death of siblings or grandparents
• Religious Observance: Additional unpaid leave may be granted for religious mourning periods

Religious Leave

• Hajj Pilgrimage: Up to 30 days of unpaid leave once during employment
• Religious Holidays: Paid leave for major Islamic holidays (Eid al-Fitr, Eid al-Adha)
• Prayer Time: Reasonable accommodation for daily prayers

Summary

Termination Types

Termination With Cause:

• Immediate dismissal without notice or compensation
• Must involve serious misconduct (theft, violence, breach of confidentiality)
• Requires proper documentation and investigation

Termination Without Cause:

• Requires notice period or payment in lieu
• Must follow proper procedures under Egyptian Labour Law
• Cannot be discriminatory or retaliatory

Mutual Agreement:

• Both parties agree to end employment
• Terms negotiated between employer and employee
• Must be documented in writing

Notice Period Requirements

Notice periods are based on the employee's length of service and salary payment frequency.

Severance Pay

End of Service Gratuity:

• Half month's salary for each of the first 5 years
• One month's salary for each year beyond 5 years
• Calculated based on final basic salary
• Minimum payment of 2 months' salary

Example Calculation: Employee with 8 years of service earning EGP 10,000/month:

• First 5 years: 5 × 0.5 × 10,000 = EGP 25,000
• Next 3 years: 3 × 1 × 10,000 = EGP 30,000
• Total severance: EGP 55,000

Probationary Periods

• Standard Duration: Up to 3 months for most positions
• Extended Period: Up to 6 months for technical or managerial roles
• Termination Rights: Either party can terminate with 3 days' notice during probation
• Benefits: Probationary employees receive basic benefits but limited severance rights

Final Pay Requirements

Employers must provide final settlement within 7 days of termination, including:

• Outstanding salary
• Accrued vacation pay
• End of service gratuity
• Any other contractual benefits

Anti-Discrimination & Retaliation Laws

Egyptian law prohibits termination based on:

• Gender, religion, or political beliefs
• Pregnancy or maternity leave
• Trade union membership or activities
• Filing complaints against the employer
• Disability (with reasonable accommodation)

Violations can result in reinstatement orders and compensation payments.

National Public Holidays

Egypt observes both fixed and variable religious holidays throughout the year.

Religious Holiday Variations

Islamic Holidays follow the lunar calendar and shift approximately 11 days earlier each year:

• Eid al-Fitr: 3 consecutive days celebrating the end of Ramadan
• Eid al-Adha: 4 consecutive days during the Hajj pilgrimage period
• Prophet's Birthday: 1 day celebrating Prophet Muhammad's birth

Christian Holidays (for Christian employees):

• Coptic Christmas: January 7
• Coptic Easter: Variable date

Holiday Pay Rules

Eligibility Requirements:

• Must have worked at least 90 days before the holiday
• Must work the day before and after the holiday (unless on approved leave)

Payment Calculation:

• Full day's pay for each public holiday
• If holiday falls on a rest day, employee receives compensatory day off
• Overtime rates apply if employee works on a public holiday

Working on Public Holidays

If an employee works on a public holiday:

• Double pay for the hours worked
• Alternative day off within the following week
• Voluntary basis only - cannot be mandatory except for essential services

Required Documents for Employment

Employment Contract Requirements:

• Job title and detailed job description
• Salary and benefits structure
• Working hours and location
• Probationary period terms
• Termination clauses compliant with Egyptian law

Employee Documentation:

• National ID: Egyptian national identification card or passport for foreigners
• Work Permit: Required for non-Egyptian nationals
• Tax Registration: Tax file number from Egyptian Tax Authority
• Social Insurance Number: For social security contributions
• Bank Account Details: For salary payments (must be Egyptian bank)
• Educational Certificates: Verified copies of relevant qualifications
• Medical Certificate: Health clearance for certain positions

Work Permit Requirements

For Foreign Employees:

• Valid passport with minimum 6 months validity
• Work permit application through Ministry of Manpower
• Employer sponsorship letter
• Medical examination results
• Criminal background check from home country
• Educational credential verification

Processing Time: 2-4 weeks for standard applications

Language Requirements

• Arabic: Official language for all employment contracts and official documents
• English: Widely used in business, especially in multinational companies
• Contract Translation: Employment contracts must be available in Arabic
• Communication: Day-to-day business communication often conducted in English in international firms

Background Checks & References

Permitted Checks:

• Criminal background verification
• Employment history verification
• Educational qualification verification
• Professional license verification (for regulated professions)

Restrictions:

• Must be relevant to the position
• Requires written employee consent
• Cannot discriminate based on protected characteristics

Data Protection & Privacy

Egyptian Data Protection Law requires:

• Employee consent for data collection and processing
• Secure storage of personal information
• Limited data sharing with third parties
• Right to access and correct personal data
• Data breach notification procedures

IP Assignment & Confidentiality

Intellectual Property Rights:

• Work-related inventions belong to the employer
• Must be explicitly stated in employment contract
• Confidentiality clauses are enforceable
• Non-compete agreements limited to 2 years maximum

Probation Period Setup

Standard Terms:

• Maximum 3 months for regular positions
• Up to 6 months for technical/managerial roles
• Performance evaluation requirements
• Clear termination procedures during probation
• Basic benefits apply during probationary period

Onboarding Timeline

What the EOR Handles

Borderless AI manages:

• Employment contract drafting and compliance
• Work permit applications and renewals
• Social insurance registration
• Tax registration and compliance
• Payroll processing and contributions
• Arabic document translation
• Local labour law compliance

Worker Classification: Employee vs Contractor

Egyptian law strictly distinguishes between employees and independent contractors, with significant legal and financial implications for misclassification.

Employee Characteristics:

• Work under direct supervision and control
• Use employer-provided tools and equipment
• Follow set working hours and location
• Receive regular salary and benefits
• Covered by labour law protections

Contractor Characteristics:

• Operate independently with minimal supervision
• Use own tools and equipment
• Set own working hours and methods
• Invoice for services rendered
• Not covered by employment protections

Misclassification Risks:

• Retroactive social insurance contributions
• Tax penalties and interest
• Employment law violation fines
• Potential employee claims for benefits

Trade Unions & Collective Bargaining

Union Rights:

• Employees have the right to form and join trade unions
• Collective bargaining is legally protected
• Strike action is permitted under specific conditions
• Employers cannot discriminate against union members

Collective Agreements:

• May override individual employment contracts
• Cover wages, working conditions, and benefits
• Binding on all employees in the bargaining unit
• Must comply with minimum labour law standards

Cultural Norms & Workplace Expectations

Communication Style:

• Hierarchical respect is important
• Direct confrontation is generally avoided
• Relationship-building precedes business discussions
• Patience and persistence are valued

Religious Considerations:

• Prayer time accommodation (5 times daily)
• Ramadan working hour adjustments
• Respect for Islamic holidays and customs
• Dietary restrictions in workplace events

Work-Life Balance:

• Family obligations are highly respected
• Extended lunch breaks are common
• Weekend work should be minimised
• Flexible arrangements during religious periods

Remote Work Considerations

Legal Framework:

• Remote work is legally recognised under new labour law amendments
• Employment contracts must specify remote work arrangements
• Health and safety obligations extend to home offices
• Working time regulations still apply

Employer Responsibilities:

• Provide necessary equipment and technology
• Ensure data security and confidentiality
• Maintain regular communication and supervision
• Cover reasonable home office expenses

Tax Implications:

• Remote work location affects tax obligations
• Cross-border remote work requires special permits
• Social insurance contributions based on work location

Industry-Specific Regulations

Banking & Finance:

• Central Bank licensing requirements
• Enhanced background checks
• Continuing education mandates
• Strict confidentiality obligations

Healthcare:

• Professional licensing verification
• Continuing medical education requirements
• Patient confidentiality regulations
• Medical malpractice insurance

Oil & Gas:

• Safety training certifications
• Environmental compliance training
• Hazard pay provisions
• Extended rotation schedules

Technology:

• Data protection compliance
• Intellectual property agreements
• Export control regulations
• Cybersecurity training requirements