One of the significant achievements of the current term of the European Parliament is establishing a legislative framework for minimum wage. This development has impacted workers in Cyprus.
The new legislative rules, established by the European Parliament in 2022, aim to set minimum wages at levels that ensure decent living and working conditions.
Member states are encouraged to promote collective bargaining, which is essential for achieving adequate minimum wages.
EU Directive on minimum wage
The content of the EU directive should be noted that although setting the minimum wage remains the responsibility of the member states, governments must ensure that their national minimum wages allow workers to live decently based on the cost of living and the general level of wages.
For assessing wage adequacy, member states may set a basket of basic goods and services in real terms or define it as corresponding to 60% of the gross median wage and 50% of the gross average wage.
Minimum wage in Cyprus
Cyprus has for the first time set a minimum wage threshold with the Minimum Wage Decree of 2022, which came into effect on January 1, 2023.
The decree initially set the minimum wage at €940 per month for full-time employment. However, the current government, in December of the previous year, amended the decree, raising the minimum wage to €1,000 per month.
Under the prevailing framework, every full-time employee must receive at least a monthly wage of €1,000 gross, while those who have not completed six months of continuous employment with the same employer must receive at least €900 gross per month until the six months are completed.
A senior official from the Ministry of Labour noted that there was a political decision to establish a minimum wage in Cyprus, but discussions and agreements within a European framework provided additional momentum for its implementation.
The official also emphasised the significance of the directive in prioritising wage adequacy and promoting collective agreements, with the implementation target set at covering 80% of the workforce.
Government aligned with EU labour policies
Speaking to Phileleftheros, Minister of Labour Yiannis Panayiotou stressed the government’s complete alignment with EU labour policies. “We intend to fully harmonise Cypriot legislation with the specific directive on minimum wage by 2024,” he noted, adding that the increase in the minimum wage in Cyprus last December from €940 to €1,000 per month has benefited 25,000 workers.
He further added that the increase in the minimum wage in 19 professions within the hotel industry, a move affecting an additional 5,000 workers positively, was made through a ministerial decree.
Asked about how compliance with the minimum wage regulation is ensured, Panayiotou referred to targeted inspections by relevant departments investigating related complaints and the use of data submitted to social security which can reveal potential violations.
Regarding collective labour agreements, Panayiotou pointed out that through social dialogue and collective bargaining, several agreements have been renewed, and others are currently under negotiation with the Ministry’s involvement.
He also noted that the government has included in its 2024 plan the development of incentive schemes for organisations and businesses that implement good labour practices, including collective labour agreements.
Support for collective bargaining
Additionally, as collective bargaining at sectoral and cross-sectoral levels is deemed an essential factor for achieving adequate minimum wages, it must be promoted and strengthened. Specifically, member states where less than 80% of the workforce is covered by collective bargaining must develop a plan of action in collaboration with social partners aimed at increasing this percentage.
Compliance and enforcement
It is also noted that under the new directive, EU countries are required to establish an enforcement system that includes reliable monitoring mechanisms, control checks, and on-site inspections to ensure compliance and address issues such as abusive subcontracting, unrecorded overtime, and the intensification of labour.
(By Nicoletta Kouroushi and Stelios Marathovouniotis)
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