Presidential Decree-Law On the Maxi
Presidential Decree-Law On the Maximum Wage for Workers in State Agencies
On 2 July 2014, the President issued Decree-Law No. 63 of 2014 establishing the maximum wage for those who work in state agencies (the “Law”).[1] On 19 July 2014, the Prime Minister issued a decree enacting the Executive Regulations of the Law (the “Decree”).[2]
The Law specifies that maximum net income shall be in the amount of EGP 35,000 and shall not exceed EGP 42,000. These new restrictions on wages are to be applied in respect of income paid from State funds, State agencies, State companies, or any company or body related thereto.
It is noteworthy that the Prime Minister’s Decree details exactly what is meant by the term “net income”, explaining that it includes all amounts received while working for the above-mentioned public entities under the term of wage, salary, bonus, incentive, overtime or extraordinary efforts, or in return for attending sessions, management boards, or committees, both within the original place of work or at any other entity, or any amount received and considered to be compensation instead of any of the above. Pursuant to the provisions of the Law, travel allowances, transportation expenses, and accommodation fees for specific tasks have been excluded from the definition of “net income”.
This Law shall apply to all workers employed by the aforementioned State agencies, with the only recognized exception being workers in the diplomatic, consular, and commercial branches of State agencies who represent Egypt abroad. This Law will only apply to such individuals during their period of work within Egypt.
Therefore, this Law also covers workers employed in public entities with legal personalities, including the Central Bank of Egypt, Nasser Bank, the National Investment Bank, and other public sector banks, as well as the different National Councils, in addition to those workers working in entities governed by their own set of rules, such as the judiciary, the armed forces and the police. As mentioned earlier, employees of the public sector companies are also covered by this Law including the Egyptian Company for Communications, the Electricity Holding Company in Egypt and its affiliates. The Decree also sets out that this Law will apply to employees whatever the status of their employment, whether their job is temporary or permanent, is in an advisory capacity or under any other name.
The Law and the Decree set out that net income shall be the total remuneration during a single calendar year, divided by twelve months. Employees must commit to reimburse any funds that exceed the set maximum wage; such funds shall then be considered Public funds.
The task of calculating total remuneration of each worker annually and determine the amounts in excess of the maximum has been delegated to the “Accounting Unit” within each state agency or company, usually comprised of staff of the Ministry of Finance within that government agency. Such staff is responsible for notifying employees of outstanding fees within 30 days of the end of the calendar year. In the event that the employee refuses to return the outstanding amounts, those amounts may be deducted from their total remuneration for the upcoming calendar year.
The Law requires those who provide any type of payment to the employees in question to inform the relevant parties within 30 days of that date, at which point the auditors of the Ministry of Finance and the Central Auditing Agency shall fully inform their employees of the funds required to be returned. In the event that the funds are not returned, the employee in question will be subject of disciplinary proceedings.
The final Article of the Law requires publication in the Official Gazette and implementation immediately, in conjunction with the start of the new State fiscal year.
[1] Presidential Decree-Law No. 63/2014 on the Maximum Wage for Workers in State Agencies, Official Gazette, Issue No. 26 (bis) (c), 2 July 2014.
[2] Prime Minister’s Decree No. 1265/2014 enacting the Executive Regulations of the Law on the Maximum Wage for Workers in State Agencies, Official Gazette, Issue No. 29 (bis), 19 July 2014.
On 2 July 2014, the President issued Decree-Law No. 63 of 2014 establishing the maximum wage for those who work in state agencies (the “Law”).[1] On 19 July 2014, the Prime Minister issued a decree enacting the Executive Regulations of the Law (the “Decree”).[2]
The Law specifies that maximum net income shall be in the amount of EGP 35,000 and shall not exceed EGP 42,000. These new restrictions on wages are to be applied in respect of income paid from State funds, State agencies, State companies, or any company or body related thereto.
It is noteworthy that the Prime Minister’s Decree details exactly what is meant by the term “net income”, explaining that it includes all amounts received while working for the above-mentioned public entities under the term of wage, salary, bonus, incentive, overtime or extraordinary efforts, or in return for attending sessions, management boards, or committees, both within the original place of work or at any other entity, or any amount received and considered to be compensation instead of any of the above. Pursuant to the provisions of the Law, travel allowances, transportation expenses, and accommodation fees for specific tasks have been excluded from the definition of “net income”.
This Law shall apply to all workers employed by the aforementioned State agencies, with the only recognized exception being workers in the diplomatic, consular, and commercial branches of State agencies who represent Egypt abroad. This Law will only apply to such individuals during their period of work within Egypt.
Therefore, this Law also covers workers employed in public entities with legal personalities, including the Central Bank of Egypt, Nasser Bank, the National Investment Bank, and other public sector banks, as well as the different National Councils, in addition to those workers working in entities governed by their own set of rules, such as the judiciary, the armed forces and the police. As mentioned earlier, employees of the public sector companies are also covered by this Law including the Egyptian Company for Communications, the Electricity Holding Company in Egypt and its affiliates. The Decree also sets out that this Law will apply to employees whatever the status of their employment, whether their job is temporary or permanent, is in an advisory capacity or under any other name.
The Law and the Decree set out that net income shall be the total remuneration during a single calendar year, divided by twelve months. Employees must commit to reimburse any funds that exceed the set maximum wage; such funds shall then be considered Public funds.
The task of calculating total remuneration of each worker annually and determine the amounts in excess of the maximum has been delegated to the “Accounting Unit” within each state agency or company, usually comprised of staff of the Ministry of Finance within that government agency. Such staff is responsible for notifying employees of outstanding fees within 30 days of the end of the calendar year. In the event that the employee refuses to return the outstanding amounts, those amounts may be deducted from their total remuneration for the upcoming calendar year.
The Law requires those who provide any type of payment to the employees in question to inform the relevant parties within 30 days of that date, at which point the auditors of the Ministry of Finance and the Central Auditing Agency shall fully inform their employees of the funds required to be returned. In the event that the funds are not returned, the employee in question will be subject of disciplinary proceedings.
The final Article of the Law requires publication in the Official Gazette and implementation immediately, in conjunction with the start of the new State fiscal year.
[1] Presidential Decree-Law No. 63/2014 on the Maximum Wage for Workers in State Agencies, Official Gazette, Issue No. 26 (bis) (c), 2 July 2014.
[2] Prime Minister’s Decree No. 1265/2014 enacting the Executive Regulations of the Law on the Maximum Wage for Workers in State Agencies, Official Gazette, Issue No. 29 (bis), 19 July 2014.