Work Regulations in Egypt Under Decree 162 of 2026: Getting Your HR and Payroll System Ready
Summary: Work regulations are mandatory for every establishment with ten or more workers under Article 137 of Egypt's Labour Law No. 14 of 2025. Minister of Labour Decree No. 162 of 2026, published in the Egyptian Gazette on 13 August 2026, now sets their general rules, required content and approval procedure. In practice, every clause in your regulations becomes a rule your HR and payroll system has to execute: leave balances, overtime pay, disciplinary deduction caps, the annual increment and the employee service file. Review the system clause by clause before you submit or amend your regulations, not after the first dispute.
Many companies treat work regulations in Egypt as a legal document that is written once and pinned to a notice board, while salaries and leave are calculated in software or a spreadsheet that knows nothing about what the regulations say. That gap between the text and the system is behind most of the errors that surface during a labour inspection or when an employee leaves. This guide explains what Decree 162 of 2026 adds, gives you a practical matrix that maps each regulation clause to the matching setting in your HR and payroll system, and finishes with a six-step plan to get the system ready.
What are work regulations in Egypt, and who must have them?
Put simply: work regulations are the internal rulebook that sets an establishment's rules on hiring, pay, promotion, leave, working hours, violations and penalties, and once approved they supplement the Labour Law and employees' contracts.
Article 137 of the Labour Law requires every employer with ten or more workers to prepare these regulations within sixty days of starting operations, of reaching that headcount, or of the law entering into force, as applicable, and to hand a copy to the competent administrative authority for review and approval. The regulations must also be posted in a visible place at the establishment and its branches. The law has applied since 1 September 2025, so the sixty-day window counted from its entry into force has long passed; the window still applies to every new business and to any business that grows to ten workers.
Decree 162 of 2026 on the general rules of work regulations was issued on 28 July 2026, published in issue 176 (continued) of the Egyptian Gazette on 13 August 2026, and took effect the day after publication. You can consult the decree record with its Arabic and English texts, an English translation of the decree, and the Arabic text of Labour Law Article 137.
What does the decree change in the approval process?
- The application goes to the competent Labour Directorate (Labour Relations Office) with three copies of the draft regulations, signed by the responsible manager and stamped with the company seal on every page, plus copies of the commercial register, tax card and social insurance number.
- The Directorate sends a copy to the competent trade union organisation within three working days, and silence for fifteen days counts as approval.
- If the Directorate objects in writing, the establishment must fix the grounds of objection within five working days at most.
- If the Directorate neither approves nor objects within thirty days of receipt, the regulations take effect the following day.
Why do work regulations matter to your HR and payroll system?
Because the decree goes beyond general wording. It expects the regulations to define how each type of leave is calculated, how overtime and its pay are organised, the caps on disciplinary deductions, and how the employee file is kept and protected. Article 3 of the decree also requires the regulations to include every benefit actually applied before they were drafted, whether it came from internal decisions, contracts or established practice, and Article 14 says the provisions more favourable to the worker always prevail in a conflict.
The practical consequence: if your system grants a benefit that is not written into the regulations, or calculates an entitlement below what they state, you have a gap that may be resolved in the employee's favour. That is why we define it this way: an HR system compliant with your work regulations is one in which every article becomes a calculation rule, a workflow or an auditable record.
The regulations-to-system matrix: 10 items your system must apply
The table below is a framework prepared by the Smart One Group team to link the legal text to the setting your system needs. It does not replace review by your legal adviser.
| Item | What the law or decree says | What your system must do |
|---|---|---|
| Annual leave | 15 days in the first year, 21 days from the second year, 30 days after ten full years or above age fifty, 45 days for persons with disabilities and persons of short stature, plus seven days for hazardous work or remote areas (Article 124) | Tiered entitlement calculated automatically from hire date, age and disability status, with pro-rata entitlement after six months of service |
| Balance settlement | Workers must take 15 days a year, including at least six consecutive days, and the balance or its cash value is settled at least every three years (Article 125) | Alerts before each three-year cycle ends, and cash-out of the remaining balance at termination |
| Casual leave | Seven days a year, at most two days at a time, deducted from annual leave (Article 127) | Block requests over two days and deduct automatically from the annual balance |
| Overtime | At least the hourly wage plus 35% for daytime hours and 70% for night hours, and no more than 12 hours on site (Article 121); the decree defines night as the period between sunset and sunrise | Separate day and night multipliers, a night boundary tied to sunset and sunrise rather than a fixed clock time, and an alert past 12 hours on site |
| Work on the weekly rest day | An amount equal to the day's wage as compensation, plus another day off within the following week (Article 121) | Create a substitute day off automatically with a one-week expiry |
| Public holidays | Twice the day's wage on top of the normal wage for that day, or a substitute day off at the worker's written request kept in the employee file (Article 129) | Let the worker choose cash or a day off, and attach the request to the service file |
| Annual increment | At least 3% of the insurable wage, due one year after hiring or after the previous increment (Article 12) | An individual due date per employee, not one date for everyone |
| Disciplinary deductions | No more than five days' basic wage per violation and no more than five days' basic wage per month, with a penalties register and a separate account for the proceeds (Decree Articles 46 and 59) | A monthly cap the system cannot exceed, a separate penalties register, and timers so investigations start within seven days and no penalty is imposed more than thirty days after the investigation ends |
| Maternity leave | Four months on full pay, at least 45 days of it after birth, up to three times during employment; one hour less per day from the sixth month of pregnancy; no compulsory overtime until six months after birth (Article 54) | A counter for entitlements used, a reduced schedule, and an automatic block on scheduling overtime during the protected period |
| Service file | A paper or electronic file for every worker, kept for at least five years after employment ends and accessible only to those legally authorised (Article 92 and Decree Article 23) | An electronic archive with role-based access and an access log, and deletion locked until the retention period ends |
A six-step plan to get your system ready
- Collect the benefits you actually give: pull every benefit granted in practice from the system, contracts and internal decisions, since Decree Article 3 requires them in the regulations.
- Match the draft regulations to system settings: use the matrix above and record, for each item, the article number, the current setting and the required one.
- Fix the calculation rules: tiered leave balances, overtime multipliers, per-employee increment dates and deduction caps.
- Add workflows and timers: substitute-day requests, investigation deadlines and absence warnings. The decree treats a worker as having resigned after unjustified absence of more than twenty non-consecutive days in a year or more than ten consecutive days, provided a warning was first sent by registered letter with acknowledgment of receipt after ten days in the first case and five days in the second.
- Secure the service file: role-based permissions, a log of every view or edit, and regular backups. This overlaps with the data protection duties covered in our guide to Egypt's Personal Data Protection Law.
- Test with real scenarios: an employee completing their first year this month, a night-shift worker, and an employee in the sixth month of pregnancy, then compare the system's results with a manual calculation before approving any payroll run.
Common mistakes in HR and personnel systems
From our reviews of client systems across different sectors, these mistakes come up again and again:
- A fixed annual leave balance for all staff, with no tiers for length of service or age.
- Night defined by a fixed clock time all year instead of sunset and sunrise, as the decree defines it.
- Increments paid to everyone in the same month, which delays some employees beyond their legal due date.
- A resignation "notice period" configured in the system, even though Decree Article 62 prohibits regulations from setting a notice period for resignation.
- Employee files in shared folders with no permissions or access log.
Off-the-shelf or custom system?
An off-the-shelf system is enough if it lets you change calculation rules without code and supports hourly pay, shifts and the new work patterns defined in Article 96 of the law, such as remote work, part-time work, flexible work and job sharing. If your business runs night shifts, several branches or a history of special benefits, a custom system or a tailored version of your current one may cost less than daily workarounds. If you run a medical practice, also see our guide to choosing a clinic management system, because doctor and nursing rosters are part of the same equation.
Frequently asked questions
Does every company need work regulations?
Every establishment with ten or more workers must have them under Article 137 of the Labour Law and Article 2 of Decree 162 of 2026. Smaller businesses are not bound by this provision, but they must still follow the law on leave, pay and working hours.
When do the regulations take effect after submission?
If the Labour Directorate neither approves nor objects within thirty days of receiving them, the regulations take effect the day after that period ends. If it objects in writing, the establishment has five working days to fix the grounds of objection.
What is the overtime rate under Egypt's new Labour Law?
Overtime pay must be at least the normal hourly wage plus 35% for each daytime hour and 70% for each night hour, under Article 121; an individual or collective contract can set a higher rate.
Can the employee file be kept electronically only?
Yes. Article 92 of the law allows the file to be paper or electronic, and the decree defines the service file as paper, electronic or both, provided it is kept for at least five years after employment ends and its confidentiality is protected.
What is the maximum disciplinary deduction from pay?
A deduction may not exceed five days' basic wage for a single violation, and total deductions for penalties may not exceed five days' basic wage in any one month, under Decree Article 46.
Do we need to update our system if our regulations were approved before the decree?
Decree Article 64 asks establishments to review their policies and regulations periodically against legislative developments, and any amendment goes through the same approval procedure. It is sensible to review the regulations and the system together in light of the new decree.
If you would like to review your current HR and payroll system or build one that matches your regulations, the Smart One Group team can help you analyse the gaps and implement the changes, with support contracts that keep the rules updated whenever a new decision is issued. Contact us to arrange a review session.
