Govt raises private sector minimum wage, preserves exemptions for businesses

The National Wages Council (NWC) announced on Sunday evening a 17 percent raise in the minimum wage for private sector workers, bringing the official monthly minimum up from LE6,000 to LE7,000.

A national minimum wage was set for the first time in 2022, but the government has provided exemptions to thousands of companies that have claimed their financial position makes it impossible to pay workers according to the legal threshold, while a majority of enterprises nationwide are excluded on the grounds they hire fewer than 10 staff.

The new increase is set to take effect from March and includes an annual bonus of three percent of the insured wage, or a minimum rate of LE250, according to an NWC member who spoke to Mada Masr on condition of anonymity.

Employers will be required to pay social insurance contributions on top of the LE7,000 minimum, the council member said, unlike the April 2024 decision that raised the private sector minimum wage to LE6,000, including employers’ social insurance contributions, which meant workers took home less than LE6,000 per month.

The LE7,000 threshold is to include in-kind benefits, such as transportation, as was the case in the previous wage hike.

The Planning Ministry also noted that, for the first time, the council has set a minimum wage for hourly work at LE28 per hour.

The decision was reached largely by consensus, the wage council member told Mada Masr, though some business representatives from the Federation of Chambers of Commerce had pushed for a smaller increase.

Employers still have the option to apply for exemptions in cases of financial hardship. Under the new decision, however, exemption requests will no longer be submitted to the NWC, but to the relevant employers' federation.

The previous decision, which took effect last May, allowed employers to seek hardship exemptions while maintaining past policies that counted all wage components — such as commissions, bonuses, allowances, profit shares and in-kind benefits — toward the minimum wage. It also applied only to businesses with more than ten employees, effectively excluding 98.9 percent of economic establishments, as Mada Masr previously reported.

According to a report by the Center for Trade Union and Workers Services, when the minimum wage was first set at LE2,400 in 2022, 3,090 companies across 30 sectors were granted exemptions. These included ready-made garments and textiles — especially export-oriented firms — as well as in tourism, paper manufacturing, retail industries, some private schools, securities companies and some retail stores.

Sunday’s decision marks the first time the private sector minimum wage has been raised ahead of its public sector counterpart.

Another NWC source told Mada Masr on Saturday that the government is expected to announce a similar decision within days.