Ministry announces further minimum wages increases

In April 2011, the Minister of Labour in Cyprus announced new increases in the national minimum wage, which covers workers in nine specific occupations, sparking strong opposition from employers. The 2011 increase was made as part of the work of the Labour Advisory Board and has reignited a debate over readjusting minimum wages. A small proportion of workers have demanded even bigger increases, along with greater coverage for more occupations, and other benefits as well.

Minimum wage to increase further

Although Cyprus does not stipulate a national minimum wage level that must be observed in collective bargaining at sectoral or company level, current legislation does specify national minimum wages and salaries that apply to nine specific occupations:

  • sales staff;
  • clerical workers;
  • auxiliary healthcare staff;
  • auxiliary staff in nursery schools, crèches and schools;
  • security guards;
  • caretakers;
  • cleaners.

The minimum wage level is set annually by the government in consultation with social partners. It is fixed at a monthly rate and enforced by a decree issued by the Council of Ministers.

According to the most recent order (No. 156/2010), issued on 16 April 2010 but effective retroactively from 1 April 2010, the minimum monthly salary for new job entrants in eight of the nine occupational categories – all except cleaners – was raised to €835 from €791 in 2009. For employees who have worked for the same employer for six consecutive months, the minimum monthly wage was set at €887 compared to €840 in 2009. And for cleaners, the minimum is set at €791 and €840 after six consecutive months with the same employer.

On 18 April 2011 the Minister of Labour and Social Insurance, Sotiroula Haralambous, announced the government’s intention to forward to the Council of Ministers a decree to further increase and extend minimum wages, proposing an increase of around 2.5%. This percentage is in accordance with the policy the government has pursued over the last three years, bringing minimum wages up to 50% of the median national wage.

Based on this adjustment, the minimum starting wage is expected to reach €855, and the minimum for people who have completed six months of service with the same employer will be €909. In the government’s view, the decree to increase the minimum wage will protect vulnerable groups, the majority of whom are young men and women employed in jobs not covered by collective labour agreements.

Reaction of the social partners

The Cyprus Chamber of Commerce and Industry (CCCI), representing employers, believes that current difficult economic conditions make it imperative to freeze minimum wages. More specifically, in view of the global financial crisis, CCCI is demanding that no further increases be made to the minimum wage, since it has in fact been increased by a total of 28% over the last four years, and relevant interventions have also been made in the framework of free collective bargaining.

On the other hand, a small proportion of workers are demanding even bigger increases for a wider range of occupations. The Democratic Labour Federation of Cyprus (DEOK) is of the opinion that the amount of the minimum wage and all salaries should be increased and maintained at 60% of the national median wage. As regards the scope of the existing legislation, DEOK has proposed the following:

  • the minimum wage should cover all occupations, in all sectors of the economy where there is no sectoral or enterprise-level labour agreement;
  • the decree should include other minimum benefits, such as pay indexation, the right to sickness leave, coverage of medical care and inclusion of workers in welfare funds.

Eva Soumeli, Cyprus Labour Institute (INEK/PEO)

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