The Cyprus government and the social partners (trade unions and industrialists and employers) held the first session of the Labour Advisory Body for the adoption of minimum wage by the end of 2021.
During today’s meeting, a representative of the International Labour Organisation (ILO) presented the basic elements of study carried out by the ILO for the adoption of a minimum wage in Cyprus. The adoption of the minimum wage was initially scheduled for 2020 but the government postponed the project due to the Covid crisis.
Speaking during the meeting, Finance Minister Constantinos Petrides said the conditions in the labour market favour the adoption of minimum wage. He stressed that a correct adoption would have many benefits for the labour market but cautioned that adopting a minimum wage in a wrong way could lead to distortions.
“On the economic policy side, we consider the implementation of a minimum wage as very important but we need to make sure that this would be determined always in the context of social dialogue and with scientific way,” he said.
He noted that if a minimum wage is adopted with a correct mechanism the benefits will be ample as it would lead to reducing inequalities, would increase productivity, would lead to a smoother functioning of the labour market and would prevent exploitation.
“If implemented in the wrong way, then it may create other distortions which may lead to the increase of unemployment or increase black (undeclared) employment something we all wish not to happen,” he noted.
On her part, Labour Minister Zeta Emilianidou said the timeframe provides for the finalisation of the minimum wage by the end of 2021.
She recalled that since 2019 the Ministry in collaboration with nine EU member-states commissioned a study by the ILO with financing from the European Commission over the adoption of a minimum wage.