Minimum wage increased for six occupations
Cyprus has a system of statutory minimum wages that applies to only six specific occupations. In April 2004, the government increased the minimum rates for these jobs by nearly 8%. This is in line with a previous decision aimed at gradually bringing the minimum wage for the six occupations up to 50% of the national median wage by 2008.
Though Cyprus has no statutory national minimum wage, the Law on Minimum Wage Levels provides for minimum salaries and wages to be set for six occupations - sales staff, clerical workers, auxiliary healthcare staff and auxiliary staff in nursery schools, crèches and schools. In line with Article 3.1 of the Law, on 29 April 2004 the cabinet passed an order increasing the minimum pay levels in these six occupations.
The decree raises monthly minimum wages for new entrants (ie wages at the time of hiring) in the abovementioned six occupational categories from CYP 320 in 2003 to CYP 345 in 2004 (an increase of 7.8%). For workers who had worked for the same employer for six consecutive months before 1 April 2004, the monthly minimum wage levels are increased from CYP 340 in 2003 to CYP 367 in 2004 (7.9%). The rate is also raised to CYP 367 for people who complete six months working for the same employer on or at any time after 1 April 2004. It should be noted that all these increases are retroactive from 1 April 2004.
The amount of the increase is in keeping with Ministerial Decision No. 55.535 of 24 April 2002, which set the goal of gradually bringing minimum wages up to 50% of the level of the national median wage by 2008. In this context, a 5.34% increase in the national median wage over the next five years was taken into account when calculating the relevant increases.
Trade unions urge that minimum wage-setting for these occupations should be maintained and improved. However, employers' organisations want the system to be abolished. In the opinion of the Employers and Industrialists Federation (OEB), the reasons that in the past made minimum wage legislation covering certain categories of non-unionised workers necessary have long since disappeared. OEB points out that the law authorising the issuing of the relevant order dates from 1941. Now, the employers argue, the particularly high level of union density in Cyprus has made it unnecessary to continue with the practice, which among other effects distorts the system of collective bargaining, since it pushes minimum wages, freely agreed in collective agreements, upwards. OEB also believes that the reasons for abolishing the system are even stronger in the case of nursery school teachers, who since 1993 have been required to hold a university-level degree and therefore cannot be regarded as a 'weak' category of worker in need of protection. In OEB’s view, modernisation of the labour market makes it imperative to abolish such state intervention.