The debate over the revision of the National Minimum Wage is intensifying, as unions and employer organisations prepare their official submissions. With figures already circulating behind the scenes, expectations are diverging sharply, setting the stage for difficult negotiations before the Labour Minister issues the final decree later this year.
Opposing positions from unions and employers
Initial indications suggest that unions and employers are moving in completely different directions. According to information obtained by Politis, certain unions intend to demand a substantial increase, reaching double-digit percentages. They argue that a higher rise is warranted because the minimum wage is now adjusted every two years rather than annually.
Employer organisations, by contrast, favour a single-digit increase and at the lower end of that range, emphasising the need for caution amid broader economic pressures.
Figures emerged in early discussions
Social partners must submit their positions to the nine-member Technical Committee by next Monday. The final decision rests with the Minister of Labour, who is expected to issue the relevant decree towards the end of the year.
According to the information available, unions plan to base their argument on the recent ruling of the European Court of Justice concerning the EU Directive on adequate minimum wages. Their demands are expected to range from an increase of €128 to €170, raising the minimum wage from the current €1,000 to €1,128–€1,170.
The ruling upheld Article 5(1) of the directive, linking minimum wages to adequacy in order to ensure a decent standard of living, as well as Article 5(4), which refers to the “dignity threshold” at 50 per cent of the average wage and 60 per cent of the median wage.
Unions repeatedly highlight the need to improve the minimum wage and to connect it with both hourly pay and indexation, insisting that meaningful support must be offered to those who rely on the national floor wage.
Employers warn of heavy impact on businesses
Philokypros Rousounides, Director General of the Cyprus Chamber of Commerce and Industry (KEVE), described the proposed increases as a “bomb” under the foundations of businesses, particularly those employing large numbers of minimum-wage workers.
He stressed that KEVE’s own detailed study, which considers inflation, unemployment, growth and the impact of the Cost-of-Living Allowance (CoLA), shows that any increase should be single-digit and at the lower end of the scale.
Lena Panayiotou, Deputy Director General of the Employers and Industrialists Federation (OEB), said that the organisation is currently processing data and applying formulas developed over the past period to support its final proposal with solid evidence.
Next steps in the review process
Once the social partners submit their positions on Monday, the consolidated document capturing all positions will be circulated on Tuesday. It will be discussed during a committee videoconference on Wednesday.
The Labour Minister, Yiannis Panayiotou, will then prepare the proposal that will be submitted to the Council of Ministers for approval. The decree is expected by late December.
The minister recently told Parliament that if the economy continues to perform positively, the lowest-paid workers should also benefit. The adjustment of the minimum wage will take place in two phases: in December 2025 for implementation in 2026, and in December 2027 for implementation from 1 January 2028.
Clarifications on CoLA and hourly pay
Responding to MPs on whether a potential increase would be in addition to CoLA, the minister underlined that “CoLA is not the increase; it is the extra amount.” He said the minimum wage would be revised based on defined criteria and benchmarks, with the link to CoLA simply resulting in a more favourable outcome.
On the issue of hourly pay, which was not included in the 2023 decree, he reminded MPs that he had already stated in December 2023 that the next review would also consider the need for clearer regulation on working hours and payment methods, so that the minimum wage is calculated more rationally.