The Mandatory Annual Pay Increment
Article 25 establishes a statutory right to an annual periodic increment for all workers covered by the law. This is not optional — it applies regardless of whether your contract mentions it, and any attempt to waive it is legally void.
Key rules:
- The annual increment must be no less than 3% of the insurable wage (الأجر التأميني)
- It becomes due after one complete year of service from the date of appointment
- Thereafter, it recurs on each anniversary of the previous increment
- The increment is calculated on the insurable wage, not necessarily the total package
What is the insurable wage?
The insurable wage is the wage figure registered with Egypt's social insurance system for the purpose of calculating contributions and benefits. It may differ from your gross salary if certain allowances are excluded. Understanding your registered insurable wage is important because:
- Your annual increment minimum is calculated on this figure
- Your social insurance entitlements are also linked to it
- Underreporting your wage to the insurance authority is an employer violation you should be aware of
What Happens If Your Employer Cannot Pay the Increment?
The law acknowledges that businesses can face economic difficulties. If your employer is genuinely unable to pay the annual increment due to economic circumstances, they are required to formally present the matter through the appropriate process rather than simply withholding the payment.
This means:
- Your employer cannot unilaterally decide not to pay and say nothing
- There is a formal procedure that must be followed
- You retain the right to challenge any failure to pay through the labour authority or the courts
Practical advice: If your increment date passes without a pay increase, first raise it in writing with your HR department. If no satisfactory response is received, contact the Ministry of Labour's competent office.
Better Contract Terms Always Prevail
Article 19 and Article 25 together confirm that while 3% is the legal minimum, your employment contract may provide for a higher increment. Common examples include:
- A fixed percentage above 3%
- An increment linked to performance reviews
- An increment that applies to the full salary rather than just the insurable wage
If your contract provides better terms, those terms are enforceable and your employer cannot reduce them to the statutory minimum without your agreement.
Wage Priority: Your Earnings Come First in Insolvency
Article 21 establishes one of the most important protections in the law: workers' wages and entitlements carry a legal privilege over all assets of the employer — movable and immovable property alike.
The order of priority:
Wage claims rank above:
- Court costs and judicial expenses
- Amounts owed to the public treasury (tax authorities)
- Conservation and repair expenses
- Any other privilege established under any other law
This is a remarkable protection. In practical terms, if your employer goes bankrupt or enters liquidation, your unpaid wages are among the first obligations to be satisfied from whatever assets remain.
Social insurance contributions owed by the employer are treated with equivalent priority.
Business Closure, Insolvency, and Sale: Wages Must Still Be Paid
Article 22 makes explicit that none of the following events extinguish wage obligations:
- Dissolution of the company
- Liquidation proceedings
- Business closure
- Bankruptcy
Any court order or official decision authorising any of these must include a deadline for settling all employee entitlements. The relevant administrative authority:
- Monitors compliance with this obligation
- Can act on employees' behalf in taking necessary legal steps
- Can represent employees in proceedings to recover their entitlements
If your employer's business is sold or transferred (including by public auction), Article 24 ensures the new owner inherits all obligations and is jointly liable with the previous employer for outstanding amounts owed to you.
Joint Employer Liability
Article 23 addresses situations where multiple parties share the employer role. All such parties are jointly and severally liable for wage and benefit obligations. This includes:
- Authorised agents acting on the employer's behalf
- Anyone to whom the employer has delegated work, in whole or in part
For expats on secondment or working through agencies, this means you can potentially claim against multiple entities if your primary employer defaults.
Practical Wage Protection Checklist for Expats
- [ ] Confirm your insurable wage is correctly registered with the social insurance authority
- [ ] Calculate your increment due date — one year from your appointment date, then annually
- [ ] Check your contract for any increment terms above the 3% minimum
- [ ] Keep payslips showing your monthly salary and any increment payments
- [ ] Monitor your employment anniversary dates and proactively raise the increment in writing if not applied
- [ ] Know your employer's financial health — if there are signs of difficulty, be aware of your priority creditor status
- [ ] If your employer is sold or restructured, confirm in writing that the new entity acknowledges all your outstanding entitlements
Court Access Is Free for Wage Claims
If you need to pursue unpaid wages or increments through the courts, Article 20 exempts workers from all court fees and judicial expenses at every stage. Courts can also order immediate enforcement of wage judgments without requiring you to post a guarantee. This makes legal action a practical — not just theoretical — remedy for expats facing non-payment.