Information for this page was compiled during December 2023 and January 2024. As Member States are currently transposing the EU minimum wage directive, national legislation can be subject to change. Eurofound intends to update these profiles in early 2025. Users are invited to contact Eurofound if they are aware of changes.
Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process.
According to the Minimum Wage Law (Chapter 183, 1941), the Council of Ministers may fix, by decree, minimum rates of wages for any occupation in which wages paid are unreasonably low. Cyprus has traditionally pursued a selective minimum wage policy, setting statutory minimum wage rates for certain occupational groups through decrees (the last of these decrees is KDP 180/2012, applicable to shop sales assistants, general office clerks, child care assistants in nurseries, child care assistants in kindergartens, teachers' aides, health care assistants, security guards, patients care takers in clinics and hospitals and cleaners).
In late August 2022, the government reformed its minimum wage policy by releasing a new minimum wage decree (KDP 350/2022) that extended the statutory minimum wage to all economic activities, with certain exceptions (agricultural activities, household employers, and maritime activities). On 20 December 2023, the Council of Ministers issued a further decree (KDP 402/2023) amending the 2022 decree. However, the amendment does not affect the country's minimum wage regime; it only updates the minimum wage rates applicable for 2024 and 2025.
The minimum wage decree excludes accommodation activities, for which minimum wage rates are set by a separate decree (KDP 06/2020) introduced in January 2020. KDP 06/2020 sets minimum wage rates for 13 professions within the industry. This decree was also amended by a new decree (KDP 268/2023) in 2023, increasing the minimum wage rates for these professions.
Unlike the previous minimum wage regime, the new minimum wage decree (KDP 350/2022) provides for a twofold participation of social partners in the minimum wage determination process:
The ‘Minimum Wage Readjustment Committee’ (MWRC) prepares and submits a readjustment proposal to the Minister of Labour and Social Insurance two months before the minimum wage readjustment is due, by relying on a set of criteria (described in the next section). The readjustment proposal of the MWRC is prepared and submitted in the form of a report. The decree does not foresee any specific procedural details on how the Committee must conclude its recommendation. In practice, the committee, in its first working cycle (from October to December 2023), submitted a report including all opinions expressed by its individual members. The new decree does not provide for any resources for research or studies either. However, the Ministry of Labour and Social Insurance has requested the committee to continue its work, independently of the foreseen readjustment cycle, and expressed its intention to provide the financial means for any research the Committee may consider necessary.
The Minister, on his part, brings the report of the MWRC to the agenda of the LAB. According to the new decree (KDP 350/2022, Article 7.1.b), the LAB members review and express their opinion on the report of the MWRC. The Minister, after having considered the opinions expressed in the LAB, prepares and submits his reasoned recommendation on the readjustment of the level of minimum wages - including a possible recommendation of zero readjustment - to the Council of Ministers. The latter has the formal authority for the final decision (and can deviate, in theory, from the above-mentioned recommendations). The readjustment process is operating in a biannual cycle. The readjustment process was activated for the first time in October 2023 and the first readjustment took effect as of 1 January 2024.
The determination of minimum wages in the accommodation industry does not follow a regulated process or schedule. The respective decree (KDP 06/2020) was introduced upon a common request by the signatory parties of the country’s sectoral collective agreement. Thus, any readjustment of the minimum wage rates in the accommodation industry occurs on the initiative of the sector’s social partners. This was the case with the decree KDP 268/2023, that increased the minimum wage rates from 1 June 2023.
The Minimum Wage Decree includes five parameters the Minimum Wage Readjustment Committee should consider while elaborating on the question of a minimum wage increase. However, the decree is rather vague as to how these criteria should be weighted. In practice, during 2023, the committee reviewed these parameters to determine whether a minimum wage increase was justifiable. Nevertheless, there was no agreed or predefined method for calculating each criterion. Therefore, the committee could not reach a conclusion on the extent of this justifiable increase.
The table below lists the five parameters, as referred to in Article 7.1.a of Decree KDP 350/2022. These parameters do not apply to the accommodation industry (covered not by KPD 350/2022, but by KDP 268/2023), as any readjustment occurs at the request of the sectoral social partners.
| Criterion | How is this defined/operationalised? | Regulation or practice |
| Purchasing power of minimum wage under consideration of cost of living variations | Just a general reference. The decree does not define how the criterion should be taken into consideration. In practice, the MWRC employs Consumer price index statistics (Statistical Service) | Minimum Wage Decree, Regulation 7.1.a.i |
| Trends of the levels of employment and unemployment | Just a general reference. The decree does not define how the criterion should be taken into consideration. In practice, the MWRC employs Labour Force Survey statistics (Statistical Service) | Minimum Wage Decree, Regulation 7.1.a.ii |
| Variation of economic development and of the level of productivity | Just a general reference. The decree does not define how the criterion should be taken into consideration. In practice, the MWRC employs the National Accounts statistics (Statistical Service) and productivity statistics of Eurostat. | Minimum Wage Decree, Regulation 7.1.a.iii |
| Variation of and trends of general wage levels and their distribution | Just a general reference. The decree does not define how the criterium should be taken into consideration. In practice, the MWRC employs the earnings and distribution of earnings statistics (Statistical Service, source of the statistics: Social Insurance Fund’ records) | Minimum Wage Decree, Regulation 7.1.a.iv |
| Impact of any minimum wage change may have on the level of employment, absolute and relative poverty indicators, cost of living and competitiveness of the economy | Just a general reference. The decree does not define how the criterion should be taken into consideration. In the MWRC there was no particular discussion over statistical sources. The members of the committee resorted to rather general assessments. | Minimum Wage Decree, Regulation 7.1.a.iv |
The Cyprus’ minimum wage regime, as applicable from 1 January 2023 with the release of decree KDP 350/2022, does not cover employees in agricultural and maritime activities, as well as activities of households as employers. Trainees and persons in vocational education are not subject to the minimum wage provisions.
The decree, finally, does not cover accommodation activities, as these are covered by a different minimum wage decree (KDP 268/2023). The latter applies to 13 professions of the accommodation industry.
The general minimum wage decree (KDP 350/2022, as amended by decree KDP 402/2023) provides for a starting rate and a higher seniority rate after six months of employment. Furthermore, the new decree provides for a sub-minimum of 75% applying to persons younger than 18 years old for casual work not exceeding two continuous months.
The minimum wage decree in the accommodation industry (KDP 268/2023) provides also for increased minimum wages upon length of service of three or six months, as well as an exception from the provisions of the decree of all post-secondary students at hotel schools who, within the framework of their studies, are employed for on-the-job training. The decree is only applicable for 13 professions of the industry.
The general minimum wage decree (KDP 350/2022) specifies 12 monthly rates without referencing a specific number of working hours. This implies that employees across various sectors may need to work between 38 and 48 hours per week to receive the full minimum wage, as in Cyprus there is no unitary statutory definition of maximum daily and weekly working time.
The minimum wage decree for the accommodation industry (KDP 268/2023) establishes 12 monthly payments. Rates for the 13 covered professions are defined in both monthly and hourly terms, based on a 38-hour workweek spread across five days.
The general minimum wage decree (KDP 350/2022) defines the minimum wage as the total gross monthly salary an employee receives for full-time work (Article 5). Overtime pay, work outside regular hours, public holiday pay, and any other benefits are not included in the minimum wage calculation (Article 9). The decree allows for reductions of 15% and/or 10% if employees receive meals and/or accommodation through an agreement with their employer (Article 10). If an employee receives both, the minimum wage rate can therefore be reduced to 75% of the full rate (Article 11). Some groups of minimum wage recipients may be entitled to additional benefits, such as public holidays, overtime pay etc., by virtue of other legislations setting minimum standards of employment in certain economic activities.
The decree for the accommodation industry (KDP 268/2023) specifies that the minimum wages for the 13 regulated professions include base salary, cost-of-living allowance, and service charges. Overtime pay and public holiday pay are not addressed by this decree. However, a separate law guarantees all accommodation industry employees 15 paid public holidays annually and overtime pay at a rate of one and a half (1.5:1).
No such report has been published in Cyprus. The ‘Minimum Wage Readjustment Committee’ (MWRC) report mentioned in previous sections is relevant to the process of minimum wage setting, but it is not publicly available.