The trade union movement has set its target for a revised National Minimum Wage (NMW), based on the criteria set out in the relevant biennial decree, proposing an increase from the current €1,000 to between €1,150 and €1,170.

The Employers and Industrialists Federation (OEB) considers that adopting the unions’ proposal to raise the NMW to €1,150 or €1,170 “would constitute an unrealistic increase that would cause irreparable damage to the competitiveness of the economy and businesses.”

The unions SEK, PEO and DEOK have submitted their proposals on the minimum wage, ahead of the Ministry of Labour decree, to the institutionalised National Minimum Wage Review Committee.

According to information from Brief, the three unions place at the core of their separate proposals the linking of the NMW to hourly remuneration, in an effort, as they note, to ensure “a fairer allocation based on weekly working hours.”

The trade union movement considers the linkage of the minimum wage to hourly pay to be essential, citing data from the Statistical Service of Cyprus and Eurostat.

Based on the data, it emerges that there are sectors of economic activity and occupations where weekly working hours exceed 45, and in some cases even 49 hours per week.

It is noted that for security guards, working hours are set at 40 per week, while for cleaners they are set at 42 hours.

According to the unions, linking the NMW to hourly remuneration accurately reflects the real value of work, eliminates distortions and violations, protects vulnerable workers, facilitates monitoring and enforcement, and strengthens transparency and fairness in the workplace.

It is also noted that in most EU member states, and particularly in Germany—where labour relations are highly developed—the NMW is linked to hourly pay.

PEO and DEOK emphasise in their proposals that the determination of the NMW should be set at 60% of the national median wage. Based on this calculation, PEO estimates that the minimum wage should be around €1,170, while DEOK, referring to European guidelines, places it at approximately €1,150.

PEO bases its calculation on a median wage of €1,955–€1,970, while DEOK uses a median wage of €1,881 for 2024.

SEK, in its proposal, does not specify a concrete level for the revised NMW. It notes, however, that it should range between 58% and 59% of the national median wage, taking into account primarily the final data for 2024 and projections for 2025. For the final amount, the Cost of Living Allowance (COLA/ATA) should also be considered separately and additionally.

SEK points out that the introduction of the NMW has not negatively affected the labour market, business profitability, or the competitiveness of the Cypriot economy.

“On the contrary,” SEK states, “what needs to be understood is that a substantial increase in the NMW, its linkage to inflation and hourly remuneration, will strengthen workers’ earnings and help reduce in-work poverty through a fairer distribution of income—objectives also set by the EU through the directive on adequate minimum wages.”

SEK further notes that at a time when businesses are recording a sharp increase in profitability relative to GDP, “it is evident that a substantial increase in the NMW would help raise wages across the entire economy.”

The Director General of OEB, Michalis Antoniou, described the trade unions’ demand for an increase in the NMW exceeding 12% as unrealistic.

“If the NMW moves close to these levels, all wages up to €2,000 will be affected, which represents the vast majority of workers, at least in the private sector,” Mr Antoniou noted.

He further argued that such an increase would cause “irreparable damage to the competitiveness of the economy.”

Regarding OEB’s proposal submitted to the NMW Review Committee, Mr Antoniou stated that the Federation has formulated a formula incorporating four macroeconomic indicators, indirectly encompassing all the elements included in the 2022 decree.

According to OEB’s Director General, these indicators are economic growth, productivity growth, inflation—which reflects the cost of living and the purchasing power of wages—and the rate of unemployment fluctuation.

He explained that an increase in unemployment would negatively affect the formula, while a decrease would have a positive impact.

It is noted that under the new NMW decree, the full amount of COLA (ATA) is added cumulatively, based on the recent agreement of the social partners on the COLA mechanism.

Mr Antoniou maintains that the national median wage is not among the indicators provided for in the decree to be taken into account when determining the NMW.

“The national median wage is not part of the discussion on shaping the NMW. Only one directive refers to it as an indicative benchmark, to establish a correlation with other wages,” he stated.

The Director General of OEB proposes the establishment of a permanent mechanism for revising the NMW, with long-term applicability.

“This mechanism,” he added, “should be based on the resilience of the real economy, improving the NMW without undermining the competitiveness of businesses.”