(MENAFN- Daily News Egypt) In Abdel Fattah Al-Sisi's first speech to the country as president, he vowed that not only would the maximum wage apply to him, but that he would give away half of his salary and his wealth as a gesture to help the country's economy.
During his speech, the president also stressed that Egyptians need to make sacrifices for the country.
In July 2014, the president issued a decree determining the maximum wage for state employees. The decree set the maximum income for any governmental employee to EGP 42,000 per month, which is thirty-five times the minimum wage.
The move was welcomed by Egyptians, government officials as well as businessmen at the time.
However, with the most powerful man in Egypt promising to sacrifice half his maximum wage "for Egypt", why are leaders of the country's business sectors refusing to accept the same wage?
The history of wage
Al-Sisi was not the first to take on the maximum wage battle. The law has been a long time coming. In July 2011, former finance minister Samir Radwan issued an official statement in which he state that a maximum wage would be applied at 36 times the minimum wage.
Following this statement, however, Finance Ministry adviser Abdel-Fatah Al-Guebali told state-owned Al-Ahram newspaper that the new cap will not cut government spending.
Then, in December 2011, the Supreme Council of the Armed Forces (SCAF) joined the game of setting a maximum wage and issued a decree to enforce it. The cap set by SCAF for the maximum wage was 36 times the minimum wage at the time, around EGP 25,000.
The decree exclaimed that the maximum wage would be applied to: "the total income that a person, working for the state, receives from public money, under the provisions of the civil law no. 47 of 1978, or employees working under special laws."
According to the decree no one would be excluded from the application of the maximum wage, as it would include employees working in public authorities, economic authorities, any cadres, consultants. The only exception would be travel expenses.
The law, however, was not implemented.
In May 2013, the Central Agency for Organisation and Administration (CAOA) announced that the maximum wage would be applied starting from the year's beginning, January 2013, and would be implemented for "all administrative leadership in state positions".
Government employees would receive optional declaration opportunities to disclose any payments they had received and which stands at over 35 times the initial appointment wages for higher education graduates, the CAOA Commissioner Jehan Abdel Rahman said.
"Working groups have been allocated to receive the statements, and to specify the exact amounts received," she added.
The interim government, headed by former interim president Adly Mansour, also took a turn at addressing the law.
In September 2013, then prime minister Hazem El-Beblawi announced that the cabinet's decision on maximum income, set at EGP 42,000, would be implemented starting January 2014. In November 2013, the government issued an official decree to implement the decision.
The cabinet's spokesperson at the time, Hany Salah, said that strict regulations would be placed and supervised by ministerial auditors to follow up on the implementation of the wage limits.
After President Al-Sisi issued his decree, several local economists and legal experts made media statements, assuring that the law is constitutional and should be applied without facing any issues.
No to maximum wages
In July 2014, several news outlets reported that the maximum wage was not being applied to the judiciary system, the police or the army. Former finance minister Hany Kadry Dimian denied these allegations.
In March 2015, the State Council's Department of Fatwas and Legislation issued a rule exempting judiciary members from the law.
Around 140 bank executives handed in their resignations after the law was passed. The legal battle, however, was initiated by the Export Development Bank in February 2015 after the Administrative Judicial Court of the State Council accepted its lawsuit, arguing that the law was unconstitutional.
The National Bank of Egypt (NBE), Banque du Caire, United Bank of Egypt, Housing and Development Bank, and Export Development Bank of Egypt were all exempted from applying the maximum wage. In late November, Banque Misr was the sixth bank to be exempted, following a ruling of the Administrative Court at the State Council.
The Principal Bank for Development and Agricultural Credit (PBDAC), Arab Investment Bank (AIBK), National Investment Bank (NIB), Industrial Development and Workers Bank of Egypt, and Egyptian Arab Land Bank were also exempted from the maximum wage.
The State Lawsuits Authority filed an appeal, on behalf of the Egyptian president and prime minister, to revoke the exemption rule for some banks.
Banks officials were rumoured to receive between EGP 150,000 and EGP 300,000 but no official record was released to confirm those figures. The figure, however, was confirmed by a bank official working in the legal department.
The bank official added that public banks were discouraged after realising how much more executives will be making at other banks.
Discussing other forms of resistance, the bank official said: "After announcing the law, several bank officials took high-value loans guaranteed by their high salary."
"Those loans would reach EGP 2m," the bank official said, adding that: "applying the law on banks would have been problematic then because the interest payments of such loans would be possibly higher than the salary they would take at the time."
Roqayah Reyad, the legal adviser for the Federation of Egyptian Banks (FEB), explained that the provisions of the law were not applicable to the banking sector and that is why it was not to be applied to the sector.
"Banks must follow the sector's law No. 195 set by the Central Bank of Egypt so when they filed a lawsuit defying the law, they won," Reyad said.
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