At Monday’s session of the House Finance Committee, where the 2026 budget of the Labour and Social Insurance Ministry was examined, Labour Minister Yiannis Panayiotou set out the government’s next steps on wage adequacy and on extending collective agreements to more sectors of the economy.
Panayiotou linked higher incomes today with better pensions tomorrow, pointing to the pensions reform package the government plans to bring to the House.
As an example of how the state could drive wider use of collective agreements, he suggested requiring companies that receive public money, either to execute projects or to provide services, to apply relevant collective agreements.
Minimum wage adjustment after CoLA
With the CoLA dispute now settled, the field opens for other pending issues in labour relations, starting with the adjustment of the national minimum wage.
Panayiotou said the social partners will soon receive invitations for the first meeting of the advisory committee on the minimum wage.
“The minimum wage will be adjusted and substantially improved twice,” he said.
He explained that the national minimum will be revised in two stages through changes to the national decree: in December for entry into force in 2026, and again in December 2027 for entry into force from January 2028.
Asked by MPs whether the minimum wage will rise beyond the CoLA increase, he replied that “CoLA is not the increase, it is something extra. The minimum wage will be adjusted on the basis of criteria and reference points,” adding that its link to CoLA will deliver an even more favourable outcome for low paid workers.
Speaking to journalists after the meeting, he declined to say what level the revised minimum might reach, stressing that this will be examined by the advisory committee.
“As long as the economy is performing well, it is not possible that those workers on the very lowest pay do not benefit,” Panayiotou said, giving the political direction.
The committee will also look at the hourly calculation of the minimum wage. Panayiotou reminded MPs that he had said in December 2023 that the next revision of the decree should “take into account the need to calculate it with a more rational approach.”
Wage adequacy and collective agreements
On wage adequacy, member states are due to submit action plans in the first quarter of 2026 under the relevant EU directive.
Illustrating the direction of travel, Panayiotou said the government is considering extending the obligation to comply with collective agreements for contractors who deliver government projects, beyond construction and into all sectors that provide services or supplies to the state. Panayiotou tied wage adequacy directly to pension adequacy.
“Strengthening the adequacy of wages goes hand in hand with the adequacy of pensions,” he said, noting that low wages may look attractive to some in terms of profit margins or competitiveness, but they have knock on effects that must be taken into account.