Egypt to set minimum wage for private sector on Sunday

Ahram Online, Monday 3 Oct 2011

Supreme Council for Wages comes close to confirming the LE700 minimum monthly wage suggested by the finance ministry, but the means of implementing it are still to be decided

Wages protest
Egyptian carries a placard with a breakdown of a worker's basic monthly expenses - far in excess of average wages (Photo: Ahram)

Egypt's Supreme Council for Wages (SCW) convened for the first time on Sunday, discussing the setting of a minimum wage for the private sector, Al-Ahram daily newspaper reported on Monday.

The council, headed by the minister of planning and international cooperation, will be officially in session until a final monthly rate is announced on Sunday, 9 October.

It also agreed to form legal committees from the ministry of planning, the private sector and labour unions to ensure the implementation of the new rate after it is approved.

The rate implementation system is likely to take into account firm sizes and numbers of workers, with a special focus on small and medium enterprises.

Representatives of business, workers and the chambers of commerce all attended the SCW meeting, where they discussed the LE700 total monthly wage suggested by the ministry of finance.

As well as the universal minimum wage, some SCW members suggested setting variable rates according to stimulate investment in marginalised areas, especially Upper Egypt.  

While the Sixth of October Investors Association approved the rate, some businessmen requested a time window before it is actually applied.

The main issue standing in the way of approving a final minimum wage rate is the method of calculating social insurance, and whether it would be incurred on total or basic salaries.

Employers are required by Egyptian law to pay almost double what employees pay as social insurance, which is calculated at 40 per cent of basic salary. The employer will put in 26 per cent, while the employee themselves pay 14 per cent.

According to Al-Ahram newspaper, the minister of finance has approved that the insurable amount would remain confined to basic pay and variable pay according to the law, with no change in legislation.

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