Filenews 29 April 2024 - by Nicoletta Kouroushi
An important task left behind by the current term of the European Parliament is the establishment of the legislative framework for the minimum wage. A development that inevitably affects workers in Cyprus as well, since the Republic of Cyprus is obliged to harmonize Cypriot legislation with the provisions of the European Directive on the minimum wage, which, as the Minister of Labour, Yiannis Panayiotou, assured "F", will take place within this year.
It is noted that the new legislative rules, adopted in 2022 by the European Parliament, aim to set adequate minimum wages that will ensure decent living and working conditions, while memberstates should promote collective bargaining, as they are considered an essential factor in achieving adequate minimum wages.
Minimum wage adequacy
Regarding the content of the EU Directive, it should be noted that while setting the minimum wage remains the responsibility of Member States, Member State governments should ensure that their national minimum wages allow workers to live in dignity, based on the cost of living and the general level of pay.
For the purpose of assessing the adequacy of minimum wages, Member States may define a basket of essential goods and services in real terms or set it at 60% of the gross median wage and 50% of the gross average wage.
Support for collective bargaining
In addition, according to the legislative framework, as collective bargaining at sectoral and cross-industry level is considered an essential factor for achieving adequate minimum wages, it should be promoted and strengthened.
In particular, Member States where less than 80% of workers are covered by collective bargaining should draw up, in cooperation with the social partners, an action plan aimed at increasing this percentage.
Compliance and control
According to the new Directive, EU countries are obliged to establish an enforcement system, which will include reliable monitoring mechanisms, controls and on-site inspections, to ensure compliance and address phenomena such as abusive subcontracting, non-recording of overtime and intensification of work.
Minimum wage in Cyprus
Regarding Cyprus, it is recalled that our country set for the first time a minimum wage limit, with the Decree on the Minimum Wage Threshold 2022, which entered into force on January 1, 2023.
The decree established the minimum wage at €940 per month for full-time employment, while the current government, last December, increased the minimum wage to €1,000 with an amending decree.
According to the current framework, every employee who works full-time must receive a monthly salary of at least €1,000 gross, while an employee who has not completed six months of continuous employment with the same employer must receive a monthly salary of at least €900 gross for full-time employment, until the completion of six months of continuous employment.
According to a competent official of the Ministry of Labour, there was a political decision on the establishment of a minimum wage in Cyprus, however, the discussion and agreement in a European framework gave more impetus to its implementation.
He also argued that it is important that the Directive attaches importance to both wage adequacy and the promotion of collective agreements, with the implementation target being set at 80% of employees.
Fully aligned with EU policies around labour issues, says government
Commenting on the issue to "F", the Minister of Labour, Yiannis Panayiotou, underlined that the government is fully aligned with EU policies on labour issues. "Our intention is that in 2024 Cypriot legislation will be fully harmonized with the specific Minimum Wage Directive," he said.
In particular, as Cyprus is obliged to comply with the European Directive, a draft law should be prepared, which concerns provisions of the Directive, which are related to the way the minimum wage is calculated and determined, as well as the preparation of a strategy for the development of collective bargaining.
Panayiotou also noted that the increase of the minimum wage in Cyprus last December, from €940 to €1,000 per month, benefits 25,000 workers. He also added that a Ministerial Decree increased the minimum wage in 19 professions operating in the hotel industry, a development from which another five thousand workers are positively affected.
Asked how compliance with the minimum wage regulation is ensured, Panayiotou referred to the control carried out through targeted inspections by the competent Departments, the investigation of the relevant complaints, but also the utilization of data submitted to social insurance and from which any violations may be detected.
On the issue of promoting collective labour agreements, Panayiotou pointed out that through social dialogue and collective bargaining, there are collective agreements that have been renewed and others for which consultations are ongoing with the contribution of the Ministry of Labour, while at the same time he pointed out that the government has included in the planning of 2024 the formulation of an incentive plan for organizations and businesses that implement good working practices, including collective agreements.
