Disagreements and reservations from employers’ organisations dominated yesterday’s meeting of the technical committee reviewing the minimum wage, over provisions contained in the bill on adequate minimum wages.
The Labour Ministry is racing to complete the adoption of the EU directive on adequate minimum wages, as Cyprus remains one of the few EU member states that has yet to implement it.
At a meeting chaired by the Director of the Department of Labour Relations, social partners held an in-depth discussion on the bill prepared by the ministry. The stated aim is for the legislation to be submitted to Parliament before the May elections.
According to information obtained, social partners exchanged views on the bill’s provisions and are expected to return to the ministry today to discuss procedural matters. These include whether they should submit their proposals in writing, prompting the ministry to return with a revised bill, or whether their suggestions will be incorporated into the existing draft.
What the bill provides for
The bill, titled “The Adequate Minimum Wages Law of 2025”, seen by Politis, establishes a framework for ensuring the adequacy of statutory minimum wages. Its stated objectives are to secure decent living and working conditions, promote collective bargaining as a means of setting wages, and strengthen workers’ effective access to protection rights in the form of a minimum wage.
The bill provides for the establishment of a Minimum Wage Adjustment Committee, appointed by the Council of Ministers. The committee would consist of three representatives of workers, three representatives of employers, and three independent academics or recognised experts specialising in labour issues.
Criteria
As stated in the bill, the committee will determine, assess and use, among other tools, indicative reference values to guide its evaluation of whether the statutory minimum wage is adequate.
For this purpose, internationally used benchmarks may be applied, such as 60% of the gross median wage and 50% of the gross average wage.
In addition, the assessment may also be based on reference values linked to indicators comparing the net minimum wage with the poverty threshold and the purchasing power of minimum wages.
Employers’ reaction
Sources from employers’ organisations told P that specific terms in the bill require clarification and changes.
They also argue that the bill lacks certain criteria for setting the minimum wage that are included in the most recent decree, such as economic growth and productivity levels.
Employers have also reacted strongly to references to the 60% of the gross median wage and 50% of the gross average wage, stressing that under the EU directive these figures are not binding, but merely recommendations to be applied gradually over time.
Horizontal provisions for contracts
Employers have expressed opposition to the provisions of Article 10 of the bill.
Under this article, the competent authority must ensure, in cooperation with services responsible for awarding and executing public contracts or concession agreements, that economic operators and their subcontractors comply with applicable obligations relating to wages and other benefits. These must align with the collective agreement declared universally applicable when public works are awarded within the territory of the Republic of Cyprus.
The competent authority may also determine, coordinate or cooperate with other authorities supervising or enforcing public contract compliance procedures, ensuring that contractors and subcontractors are obliged, through the awarding authority, to pay wages and benefits in line with the relevant collective agreement.
Companies that have been convicted in the previous three years for violating the law and/or the Minimum Wage Law will be barred from submitting bids for public sector projects.
Data collection
Strong objections have also been raised over data collection requirements, which employers describe as a bureaucratic and complex process.
Under the bill, employers would be required to register data in an information system to be specified by ministerial decree.
The competent authority would then be required to submit, every two years and before 1 October, a report to the European Commission containing data and information on the level and development of collective bargaining coverage, as well as on statutory minimum wages.
Promotion of collective bargaining
With regard to collective bargaining, the bill states that if coverage of workers by collective agreements is found to be below the 80% threshold, the competent authority must establish a framework with appropriate conditions to promote collective bargaining, in line with national law and practice.
This may be done either through legislation, following consultation with social partners, or through an agreement with them.
The authority is also required to take measures, where appropriate, to protect the exercise of the right to collective bargaining for wage-setting purposes, and to protect workers and trade union representatives from discriminatory actions related to their employment because they participate, or wish to participate, in collective bargaining.
In addition, measures may be taken to promote collective bargaining, including the protection of trade unions and employers’ organisations that participate, or wish to participate, in such negotiations.
The bill also calls for the preparation of an action plan to promote collective bargaining, setting out a clear timetable and specific measures for gradually increasing coverage.
Trade unions positive, PEO seeks clarification
Trade unions have expressed a generally positive stance towards the philosophy of the bill. Their proposals focus mainly on technical issues related to its practical implementation, pending the bill’s final submission to the Council of Ministers.
The trade union federation PEO, however, has voiced reservations over the definition of the statutory minimum wage. It is seeking clarification that legislated minimum wages will also include minimum entry pay rates, as agreed in sectoral collective agreements.