EMPLOYERS OBLIGATIONS IN CYPRUS
Cyprus based Paralimni Lawyers, G. Kouzalis LLC, would like to inform about employers obligations regarding employment in Cyprus.
A general responsibility of the employer is to ensure the safety, health and welfare of his/her employees or himself/herself (for a self-employed) and to protect third persons who may be affected by the activities of his/her enterprise.
Who is considered employer/self-employed person
According to the Safety and Health at Work legislation, “Employer” means a natural or legal person having a relationship of employment (oral or written agreement) with the employee. Employer is also a person who has no employees but carries out an economic activity or manages a business with or without a profit. “Self-employed person” is a person who works for gain or reward other than as an employee.
General Duties of employers/self-employed
These duties include:
- The provision of adequate premises, installations and work equipment.
- The implementation of safe systems and methods of work.
- Arrangements for ensuring safety and health in relation to the use, storage and transport of objects and substances.
- The provision of information, education, instruction and supervision.
- The provision of adequate means and protection measures.
- The keeping of work areas, including access areas and exits, in a safe condition and without risks to health.
- The maintenance of proper and adequate arrangements for the welfare of the workers.
- The setting up of the necessary organization.
- Adjustment of the protective and preventive measures according to the changes in the work environment.
- The consultation with employee
General principles of risk prevention
An employer/self-employed person should implement, among others, the following principles:
- Avoid risks.
- Assess risks that cannot be avoided.
- Combat the risks at the source.
- Adapt the work to the worker.
- Monitor the development of technology.
- Set priority in taking collective measures of protection against taking individuals ones.
New employer obligations.
In brief
The House of Representatives voted in favour of certain amendments to the provisions of the Protection of Wages Law (“Law”), which was published in the Cyprus Government Gazette on 16 December 2022, introducing new obligations for employers.
Important provisions are introduced in relation to the method of salary payment, obligation of issuing payslips and processing of salary deductions.
In detail
Method of salary payment
Employers are required to make salary payments either through a deposit to a bank account or other payment account of the employee’s choice or through a bank cheque in the name of the employee. Cash payments are exceptionally permitted only if:
- the employee is still in process of opening a bank account or other payment account (permitted for a maximum period of 4 months from the employee’s hire date)
- the employee’s application for opening such account has been rejected (the employer is required to provide relevant confirmation from the financial institution to the Director of Labour Relations)
- there is a collective or other written agreement in place signed by both parties, which provides that salaries will be paid in cash on a weekly basis.
Obligation to issue payslips
Employers are now required to provide to their employees a payslip in written or electronic form, within 5 working days from the date of salary payment. The minimum information such a paylsip must include, are listed in the Law.
Records must be kept and made available within 15 calendar days from a relevant request by an Inspector or other official.
Social insurance contributions applicable to employees effective 1st January 2024
The Department of Social Insurance Services lays down yearly the maximum amount of earnings used for the purpose of calculating the contributions to the Social Insurance, Redundancy, Training and Development Funds.
Based on an announcement issued on 29/11/2023 by the Social Insurance Services Department, the maximum amount of insurable earnings for 2024 has been revised upwards from the previous year to €1.209 per week, €5.239 per month and €62.868 per annum.
It is noted that contributions to the Social Cohesion Fund are calculated on actual earnings, not subject to the above caps.
Please refer to the below summary table for the applicable contribution rates which are payable by employers and employees for 2024:
| Social insurance contribution rates for 2024 | |||
| Fund | Employer | Employee | |
| Social Insurance | 8,8% | 8,8% | C |
| Redundancy | 1,2% | – | C |
| Training and Development | 0,5% | – | C |
| Social Cohesion | 2,0% | – | N.C |
| GHS (General Healthcare System) | 2,9% | 2,65% | C** |
C=Cap at €5.239/ month; N.C=No Cap, C**= Cap at €180,000/ year
Social insurance contributions applicable to self-employed persons effective 1st January 2024
The contribution on Social Insurance rate of self-employed persons for 2024 is 16,6% and 4% GHS on insurable earnings.
It should be noted that the maximum income on which GHS is imposed is €180000. In cases where GHS has been withheld on amounts that exceed €180000, a refund application form should be submitted to the Health Insurance Organisation.
The above is not legal advice and is provided for information only. We accept no liability arising to any person for any loss or damage suffered through using this information.
For more information contact G. KOUZALIS LLC, Lawyers based in Paralimni Cyprus at lawfirm@cytanet.com.cy, tel. 00357 23811788