1. Legal Framework
Subscription in the public social and medical insurance scheme is obligatory, unless the employer receives an exemption from the system, if he establishes a private insurance fund under Law 64/1980 (which is nearly impossible to do).
The employer may also receive a partial exemption from part of the subscriptions relating to insurance against work injuries and/or illnesses, if he provides an alternative medical scheme. There is no obligation on the employer to introduce a private medical plan. This is strictly a policy decision by the employer.
The social solidarity regime regulates:
- insurance against old age, disability and death;
- insurance against work injuries;
- insurance against sickness;
- insurance against unemployment; and
- insurance of social care to pensioners.
2. Required Contributions
The employer’s duty is discharged by paying statutory monthly subscriptions for each employee. In this case, the employer will not be directly liable for any sick pay or pensions to the employees.
The Social Solidarity Authority is responsible for making such payments to the employees, although this is not the practice in case of sick pay.
Both the employer and the employee are required to pay a monthly contribution to the competent social solidarity office, as part of a statutory scheme to cover sick pay, medical services, pension entitlements, and other benefits. The employer deducts the employee’s share and delivers it to the Social Solidarity Authority.
The contributions are calculated as a percentage of each of the two components of the employee’s salary (basic and variable). The amount of each component used to calculate the contributions is capped by law. This means that the employee may only be insured up to the cap set out by law, even if, in reality, he is paid a higher salary, which is usually the case. The cap is currently set out at ( EGP1’120.00) for the basic salary and (EGP2’110) for the variable salary. It is marginally increased every year.
Subscription in the public medical insurance scheme is obligatory, unless the employer receives an exemption from the system, if he establishes a private fund (nearly impossible to do.).
If the employees are governed only by the state public insurance, the employee will have to go the competent medical insurance authority to determine that he/she is sick and to determine the number of days of leave entitled by the employee. The employee will submit the report to the employer in order to abstain from going to work. Under the state run insurance scheme, the employer does not have to pay any wages for the days of the sick leaves to the employee. The employer’s liability in relation to sick pay is satisfied by paying the monthly installments for the social solidarity office, from which the employee may claim sick pay.
If the employees are medically insured through a private scheme, the rules of the private scheme shall apply. These rules must not be less favourable to the employee than the state scheme rules.
4. Required Maternity / Sickness / Disability / Annual Leaves
A female employee is entitled to 90 calendar days of maternity leave, in connection with child labour, with full compensation equal to her salary. The employee is not entitled to more than three maternity leaves during her entire service.
According to the law, the competent social solidarity office pays 75% of insured salary of the employee (basic + variable), currently capped at about EGP2’500. The employer is under the obligation to pay the remaining 25% in addition to the rest of her actual salary. However, in practice, most employers do not make their employees get their payment from the social solidarity office. Most employers fully pay the 90 days to their employees.
If the number of employees in the establishment is 50 or more, the law gives the right to the female employee to take an unpaid leave for a period of not more than two years to care for her child. The female employee is not entitled to this unpaid leave except two times during her entire service. The working mother is entitled to receive the aforementioned leave to care of her child regardless of his age.
The employer cannot fire an employee or terminate her service during her maternity leave.
An employee who spent a year in service has an annual leave of 21 working days. It becomes 30 working days for employees who are over 50 years old or who spent 10 years or more in service for any employer. Employees working in difficult, dangerous jobs, in jobs that are detrimental to health (for example cement factory workers), or in remote areas defined by the law, are entitled to seven more days than the leave provided above.
The employee cannot give up his leave. The employee must take at least 15 days of leave every year, at least six of which must be continuous. The minimum required per year is a matter of public policy and neither the employee nor the employer can deviate from it by way of agreement. The employer has the right to decide when the employee can take his leave based on the work conditions and requirements and may force him to take it. In all events, the employer must settle the accrued vacations or give consideration for the unused portion thereof every three years.
An employee, who has worked for one employer for five continuous years, has a right to one paid leave of one month for pilgrimage to Mecca or for the visit of the Jerusalem. The employee may take this leave only once during the employee’s entire employment for any employer.
There is no pre-determined allowance in the law for the number of days of sick leave. It is determined on a case-by-case basis by the competent medical authority.
The treatment of sick leaves will differ in two cases: (i) the case where the employees are medically insured only through the state public medical insurance and (ii) the case where employees are insured by a private scheme adopted by the employer.
5. Mandatory and Typically Provided Pensions
To be eligible for retirement pension on reaching the age of 60, an employee must be registered in the social solidarity system and has been paying social solidarity contributions for not less than 10 years. The employee is entitled to delay his/her retirement beyond the age of 60 until the said ten-year period is completed, unless the employer chooses to end the employee’s contract and pay the employer’s share in the remaining social insurance contributions that would make the employee eligible for pension.
As for early retirement: to be eligible for pension prior to reaching the age of 60, an employee must be registered in the social insurance system and has been paying social solidarity contributions for not less than 20 years.
In certain cases where the employee has worked (and has been socially insured) for any duration but is not eligible for pension, the employee is eligible for a single lump sum compensation calculated based on the time the employee spent in service while being registered in the social insurance system.