Egypt's private sector remains exempt from minimum wage law

Owners of businesses in certain fields or geographic areas might be spared the requirement to pay their employees a minimum wage, Minister of Industry and External Trade Mounir Fakhry Abdel-Nour told Egypt's official news agency MENA on Thursday.

The exempted sector might include small and medium enterprises, villages, and the tourism and textile sectors.

According to the minister, nothing has been decided yet. The final decision should be made by the National Council for Wages, which includes the government as well as business and workers representatives.

Abdel-Nour’s statements come one day after Egypt's finance minister announced the rules for the new minimum wage for public sector workers of LE1200 ($171) per month, starting January 2014.

Take-home pay will be less than the announced LE1200, as the government says deductions will be made for pensions, insurance and tax.

However, bonuses granted to employees working in remote areas or handling risky tasks will not be deducted.

Thus, the government should pay an employee at the base of the bureaucratic system, who takes home LE731 ($104) per month, an extra LE470, according to a statement from the finance ministry.

By removing the pensions allocation, the take-home pay of the employee will decrease to LE1022 ($146), according to calculations made by Ahram Online based on the figures released by the ministry.

However, the lowest-paid employees will not pay income tax on their wages, as the lowest income bracket for the tax was recently raised from LE5,000 to LE12,000 a year.