Egypt .. 8 sectors in crisis by applying the minimum wage of 2,400 pounds

The General Federation of Chambers of Commerce in Egypt, with the exception of 8 sectors, has called for the application of the minimum wage in the private sector, which will enter in effective from 1 January 2022.

The union has made an official request to the Egyptian Government’s Minister of Economic Planning and Development, Dr. Hala Al-Saeed, with the exception of companies operating in the sectors of health, procurement, building materials, pharmacy, education, security and guard services And the inclusion of workers abroad and NGOs from the application of the new minimum.

From 1 January, all private sector companies in the country will have to pay their employees a minimum wage of 2,400 pounds per month. Last September the Official Gazette published the decision of the Minister of Urban Planning and the President of the National Wages Council, in on the implementation of the minimum wage in the private sector, set in approximately £ 2,400, as of January 1, 2022. The decision established that the salary will be calculated on the basis of the salary stipulated in point (C)) of article (1) of the Labor Law.

The Federation of Chambers of Commerce attributed its claims, with the exception of 8 sectors from the application of the minimum wage, to the density and diversity of the volume of work in these sectors, e in some cases to the high production costs, in addition to the negative effects caused by the “Covid-19” on the sectors.

Employers and union firms pay wages they represent in media 25% of production costs, which exceeds the media global from 15% to 19%. But applying the minimum wage means an increase in the percentage to 30%, which could push some of them out of the market.

The union justified its position by entrusting many companies in these sectors to seasonal and young workers who usually require expensive training, as well as a large number of workers who do not contribute directly to the production processes.

The union proposed to exclude 40% of workers who do not directly contribute to production processes, along with new hires, from the minimum wage for a period of 12 months. He called for a clear definition of the minimum wage and that it includes everything the worker receives in change of his job, whether fixed, variable, in money or in nature, and includes allowances, incentives and subsidies obtained by workers.

But there are other sectors that are trying to exclude them from the decision, as the Egyptian Federation of Chambers of Tourism believes that the companies in the sector have not yet fully recovered from the consequences of “Covid-19”. Tourism companies filed a similar request to the National Wage Council to exclude them from applying the minimum wage in the private sector last month.

For the first time, workers in private sector companies will receive a minimum wage of £ 2,400 per month, starting next January, when the decision is implemented.

The decision means higher labor costs and higher contributions to the National Social Insurance Organization when he enters in force. Companies have until the end of this month to submit claims to the National Wage Council if they are not in able to support the wage increase.

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