Filenews 19 February 2025
The Council of Ministers of the Republic of Cyprus has taken important decisions aimed at improving wage conditions, enhancing employment and regulating the employment of foreign workers in the local labour market, according to a statement by the Minister of Labour and Social Insurance, Mr. Yiannis Panayiotou.
These changes are expected to particularly affect foreign workers, who cover a significant proportion of staffing needs in various sectors of the economy.
Minimum wage increase in the hotel industry
In order to improve the incomes of low-wage workers, it was decided to increase the minimum wages in 19 professions of the hotel industry by 3.54%, with effect from January 1, 2025. This decision follows the Decree that came into effect in June 2023 and provided for an increase of 7.12%. Overall, increases in the hotel industry over the last two years amount to 10.66%, enhancing the salary adequacy of thousands of employees, both Cypriots and foreigners.
Boosting employment and reducing unemployment
The minister said government policy also aims to further reduce unemployment below 5% and increase employment above 80% in 2025. To achieve these objectives, vocational training programmes will be implemented and emphasis will be placed on the integration of specific population groups into the labour market. In parallel, controls to combat undeclared and undeclared work will continue.
Regulation of employment of foreign workers
Due to the increased demand for personnel, the Council of Ministers approved the new "Framework for the Employment of Foreign Workers", which regulates the employment of third-country nationals. Key modifications include:
- Creation of a Tripartite Advisory Committee to monitor the procedures.
- Update of occupations with an increased quota of foreign workers due to lack of domestic manpower.
- Possibility of mobility of foreign workers within the same enterprise.
- Improvement of the living conditions of foreigners, by increasing the maximum cut-off for housing from 10% to 25%, if specific criteria are met.
- Compulsory participation in vocational training programmes in certain sectors.
- Introduction of a mechanism for revoking employment permits for foreigners in case of negative effects on the local labour market.
Online application platform
A new digital tool is expected to go live in March, facilitating the electronic submission and management of employment applications for foreign workers. At the same time, the access of foreign students to the labour market is enhanced, while the attraction of highly qualified workers is promoted through the European Union's Blue Card.
