Minister hails minimum wage, but CoLA dispute remains

One of Cyprus’ largest reforms has been implemented starting this year with the national minimum wage now in force, Labour Minister Kyriacos Koushos said on Monday. Though heralding the progress, the minister is also set to meet with unions this week to discuss the cost of living allowance (CoLA).

This is the first time a national minimum wage is being rolled out set at €940 per month. For the first six months of employment the wage will be at least €885 – later rising to the minimum threshold of €940.

It is expected to affect around 40,000 workers however those working in agriculture, shipping and domestic workers are exempted from the minimum wage requirements, as are interns or individuals undertaking training for a degree or professional qualifications.

A year from now, the minimum wage will be re-evaluated, taking into account the purchasing power of the €940, the employment and unemployment levels, overall wages and their distribution as well as poverty indicators and the impact of changing the minimum wage.

Koushos is set to meet unions next Monday over CoLA discussions. Two weeks ago, trade unions gave the government and employers a two-week ultimatum to agree to the full reinstatement of CoLA, threatening industrial action otherwise.

The minister reiterated he has the role of negotiator in finding a resolution between the two parties. He will meet with both unions and employers on January 12.

The employers’ organisations and unions signed a transitional agreement at the end of 2017, maintaining 50 per cent of the rise in the retail price index is incorporated in wages once a year.

Fully restoring CoLA would come at an estimated €150 million added to the public sector payroll which has not been factored into the 2023 state budget.

As businesses face stark inflation rates and spiraling energy costs, they say full restoration of CoLA is not viable as it effectively translated to nine per cent pay rises on a gross salary. Unions have threatened strikes if their demands are not met.

If unions and employers do not reach an agreement, the transitional CoLA agreement that applies since the beginning of 2018 would remain. There is a provision in it which stipulates that if the two sides fail to agree on a new CoLA formula the transitional agreement stays in force.