The government aims to safeguard the purchasing power of workers without endangering business viability, Labour Minister Marinos Mousiouttas said, commenting on reactions to the minimum wage increase.
Speaking on RIK television’s central news bulletin, Mr Mousiouttas stressed that the Ministry’s role is mediatory, seeking to maintain industrial peace, improve earnings, and ensure the economy can absorb the increases simultaneously.
Meanwhile, employers have strongly opposed the decision.
The Cyprus Federation of Employers and Industrialists (OEB) estimates that the increase of approximately 8.8% exceeds the capacity of the real economy and is not sufficiently justified based on productivity.
According to OEB, the total cost to the employer surpasses €1,250 per employee, a fact they warn could create pressure on marginally viable businesses, particularly in the event of a new economic crisis.
OEB also expressed concern about potential inflationary pressures caused by passing the costs onto the consumer.
For their part, trade unions deem the minimum wage increase insufficient.
The Cyprus Workers’ Confederation (SEK) stated that the minimum wage still fails to cover basic subsistence needs, especially for workers in retail, supermarkets, cleaning, and security sectors.
Despite the recorded economic growth, wages in Cyprus remain low relative to the GDP and productivity, and SEK requested a review of the decision before the final decree is issued.
SEK General Secretary Andreas Matsas said that workers receiving the minimum wage are part of a group unaffected by tax reform and that the government should have been more sensitive.
The new minimum wage comes into effect on 1 January 2026, with a two-year implementation horizon and a review scheduled for 2028.
Based on the Council of Ministers’ decision, the minimum wage is set at €979 for new employees and €1,088 after completing six months of employment.
The minimum wage remains a central topic, and dialogue appears set to continue beyond the festive period.