Increase in the Wages of all State Workers Explained

The Council of Ministers approved a package of immediate measures to mitigate the effects of the global economic repercussions on the citizens, in implementation of the directives of President Abdel Fattah Al-Sisi in this regard, as he agreed to increase the bonuses for the state workers, and to accelerate their due date, to be implemented from the first of April 2022 instead of the first of July 2022.

This new Amendment is an attempt to accelerate the employee\’s entitlement to the periodic bonuses, granting a special allowance to employees who aren’t subject to the Civil Service Law, increasing the additional incentive for state workers, deciding on a special grant for workers in public sector companies and the public business sector, and increasing the civil pensions.

The state will bear the cost of the early disbursement of the periodic bonus to those who are subject to the Civil Service Law and the special allowance for those not subject to it, in addition to the early disbursement of an additional incentive of 6.8 billion EGP as of the first of April, in addition to the cost of raising the percentage of the periodic bonus for those who are subject to the Civil Service Law, to be (8%) instead of (7%), and the special bonus for those not subject to it to be( 15%) instead of (13%),  at a total value of 1.2 billion EGP.

Law no.16 of 2022

Important Provisions of the New Law Explained

Article 1: Employees subject to the provisions of the Civil Service Law promulgated by Law No. 81 of 2016

The employees who are subject to the provisions of this law, as an exception, their entitlement to the periodic bonus shall be accelerated to be due on the first of April 2022, and this bonus shall be at the rate of (8%) of the job wage for each of them, on 31/3/2022, with a minimum of (100) EGP per month.

This bonus is considered as a part of the employee’s job wage from the 1^st of April 2022, without prejudice to the entitlement to the annual periodic increment established in accordance with the text of Article (37) referred to on its 1^st of July 2023.

Article 2: Employees who aren’t subject to the provisions of the Civil Service Law

1. The employees who are entitled to the periodic bonus, who aren’t subject to the provisions of the aforementioned law are accelerated, to the 1^st of April 2022, and as of this date, these workers are granted a special bonus of (15%) of their basic wage, for each of them, on 3/31/2022 or on the date of their appointment for those who are appointed after this date at a minimum of (100) EGP per month, and this allowance is considered as a part of the worker’s basic wage and is added to it as of 1^st of April 2022.
2. This special bonus which is stipulated in the first paragraph of this article doesn’t apply to public service bodies, economic public bodies and other public legal persons that pay the annual periodic bonus to their employees at a percentage of no less than (8%) of their job wage. If that allowance is granted at a rate of no less than (8%) of the basic wage, then these workers are granted as of 1/4/2022 a special allowance calculated on the basis of the difference between the percentage stipulated in the first paragraph of this article and the percentage on the basis of which the annual periodic allowance is calculated and includes the value of the special bonus for the basic wage for each of them.
3. The provisions of the aforementioned two paragraphs of this article don’t prejudice the entitlement of the annual periodic increment determined for the workers stipulated therein in accordance with the laws, regulations and special decisions regulating them from the 1^st of July 2023.

Article 3: Incentive increase

As of the 1^st of April 2022, the additional incentive for employees who are subject to the provisions of the Civil Service Law, and for employees not subject to it, will be increased monthly in cut-off financial categories by:

• 175 EGP for the fourth financial grades and below
• 225 EGP for the third financial degree
• 275 EGP for the second financial degree
• 325 EGP for the first financial degree
• 350 EGP for the degree of general manager/senior
• 375 EGP for the high degree
• 400 EGP for the excellent degree, or their equivalent

 Employees or workers, who are appointed after this date, benefit from this incentive and this incentive is considered as a part of the supplementary wage or the variable wage for each of them.

Article 4: Employees who are subject to this Law

State employees and workers in the application of the provisions of Articles 1, 2 and 3 of this law are permanent and temporary employees and workers with comprehensive remunerations, and those with public positions and fixed wages within the Arab Republic of Egypt whose financial appropriations are included in the budget and whose employment affairs are regulated by special laws or regulations, as well as workers in public service bodies and bodies general economic.

Article 5: The acceleration of the periodic bonus

As of the 1^st of April, companies grant their employees a monthly financial grant from their own budgets equal to the difference between the percentage of the annual periodic bonus assigned to them and the percentage of the special bonus established for workers In the country who aren’t subject to the provisions of the Civil Service Law promulgated by Law No. (81) Of 2016, according to the text of Article two of this law as a maximum, and this grant is calculated according to the same rules on the basis of which these companies calculate the periodic annual bonus for them, and this grant doesn’t include the basic wage and it is paid as a lump sum.

The provision of the previous paragraph of this article doesn’t prejudice the entitlement to the annual periodic bonus for the employees stipulated in it according to the regulations and decisions regulating it from the first of July 2023.

In cases where the total amount that the worker receives in the companies referred to in the first paragraph of this article from the basic wage, bonuses, allowances of all kinds, occasions and other fixed and semi-fixed items in the worker’s comprehensive wage, whatever its name, is less than 2700 EGP per month after applying the increase mentioned in the first paragraph, then the income of the worker shall be increased, to the difference, bringing the total amount the worker receives per month to 2,700 EGP, and the competent ministers set the rules for implementing this paragraph.

Article 6: Exceptions to pensions

1. As an exception from the provisions of Article (35) of the Social Insurance and Pensions Law promulgated by Law No. 148 of 2019 and Article (123) of the Law of Retirement, Insurance and Pensions for the Armed Forces, promulgated by Law No. 90 of 1975, the entitlement to increase pensions for 2022 is accelerated to become on the first of April 2022 for pensions due in 31/3/2022 and by the same rules mentioned therein, without prejudice to the entitlement of the increases that are decided as of the first of July 2023 on the dates stipulated in the two aforementioned articles.
2. The provisions of the increase referred to in the previous paragraph shall apply to the pensions established in accordance with the provisions of the aforementioned Social Insurance and Pensions Law, which are due during the period from 1/4/2022 to 30/6/2022, as of the date of pension entitlement.
3. The Social Insurance Fund stipulated in Article (5) of the aforementioned Social Insurance and Pensions Law shall bear the financial burden resulting from accelerating the disbursement of the prescribed increase in pensions according to its provisions.

Article 7: Cases in which the worker can’t combine the allowance in their pensions

It isn’t permissible to combine the allowance stipulated in the second and fifth articles of this law and the increase that is decided as of the first of April 2022 in the pension due to the worker on his own behalf, 

Taking into account the following:

1. If the worker’s age is less than the age determined for the end of his service, he shall be entitled to the special allowance. If this allowance is less than the increase in the pension, the pension shall be increased by the difference between them.
2. If the worker has reached the age prescribed for the end of his service, he is entitled to an increase in the pension if the increase in the pension is less than the increment, the difference between them shall be due from the entity in which he works.

Article 8: Decisions to implement the provisions

The Minister of Finance shall issue the necessary decisions to implement the provisions of this law, and the ministers, each within his jurisdiction, shall issue the necessary decisions to implement the provisions of Article 5 of this law.

Article 9: Date of application

This law shall be published in the Official Gazette, and shall come into force from the 1^st of April, 2022.

Conclusion

These new decisions from the Government come within the framework of the current developments on the global scene, which require rapid intervention to reduce the burden on the citizens, sending a message of reassurance to the citizens, that the political leadership and the Egyptian state leaders feel the pulse of the Egyptian street, and respond to its needs and aspirations.

Analysts and traders believe that the salary and pension increase starting from the 1st of April will positively affect consumption and economic growth during the upcoming period, ruling out that these increases will significantly affect inflation rates.