Egypt's cabinet will announce a new wage cap to be applied on all public sector and government employees by the end of August, according to the newly appointed Finance Minister.
But the cabinet will not set a maximum wage rate in the private sector, enabling it to retain its competitive edge, Hazem El-Biblawy said.
During the first meeting of the ‘wage reform committee’, El-Biblawy said the salary cap will be enforced on all institutions, companies, banks and organisations fully owned by the government.
It will also be applied to all employees whether they pay is allocated from the state budget or through foreign aid programmes, he said.
El-Biblawy added that to enable quick reform the cabinet will not await the results of in-depth studies currently underway on salaries before reforms begin.
He explained that the upcoming maximum wage rate will be temporarily set until the proper examination of the subject is undertaken. The minister added that such in-depth studies could take over a year to finish.
El-Biblawy said the new wage structure would be “very flexible” and subject to periodic review.
The minister also suggested wage reforms would only be partially implemented due to a shortage of accurate information and the fear of driving high calibre employees away from the public and governmental sector.
Wage reform will aim to link wages to productivity and achieve social justice by amending Egypt’s law no. 105 from 1985, which regulates maximum wages.