- within Law Department Performance and Antitrust/Competition Law topic(s)
- in Turkey
- with readers working within the Technology industries
The employment law landscape in Cyprus continues to evolve at pace, with significant legislative reforms already introduced in 2025 and further impactful changes taking effect in 2026. This newsletter provides a concise overview of the key employment law updates, new measures in force as of 2026, and anticipated reforms that employers and HR professionals should have firmly on their radar.
Key Updates for 2025
1| ERGANI Registration
Following the enactment of the Transparent and Predictable Terms of Employment (Essential Terms of Employment for Registration in an Electronic System) Decree of 2024, employers were required to ensure the timely registration of the essential terms of employment for all employees in the "ERGANI" electronic system. For further details please refer to our separate newsletter on this topic dated 7th January 2025 by clicking HERE.
2| Law 42(I)/2025 – Violence and Harassment in the Workplace
The Law on the Prevention and Combatting of Violence and Harassment in the Workplace substantially strengthens the Cyprus legal framework by broadening the definition and scope of workplace violence and harassment. The Law enhances employee protections and introduces mandatory zero-tolerance policies, codes of conduct, reporting and enforcement mechanisms and workplace support measures. For further details about Law 42(I)/2025 and its implications, please refer to our May 2025 newsletter.
3| Telework in the Public and Private Sectors
Law 215(I)/2025 establishes a comprehensive legal framework governing teleworking in the public service. The Law will enter into force on 2 April 2026 and sets out eligibility criteria, employees' rights and obligations and the responsibilities of public authorities, with the objective of ensuring service continuity and effective supervision. In the private sector, teleworking has been regulated since 2023 under the Framework Regulating Remote Working Law (Law 120(I)/2023). The Ministerial Decree specifying the minimum and maximum reimbursable costs to be borne by employers remains pending and is expected to be issued soon.
4| Cost of Living Allowance (COLA)
In 2025, an agreement was reached between the social partners regarding the payment of the Cost-of-Living Allowance (COLA), implementing the gradual restoration of the COLA provided to employees in the public sector. The agreement applies from 1 January 2026 and also affects private sector employees whose contracts provide for COLA payments based on public sector practice.
5| Family and Work–Life Balance Updates
The Promotion and Protection of Breastfeeding Regulations of 2025 expected to enter into force on 4 July 2026, establish minimum mandatory requirements for breastfeeding rooms in workplaces and public spaces. Amendments to the Leave (Paternity, Parental, Care, Force Majeure) and Flexible Work Arrangements for Work-Life Balance Law of 2022 (Law 216(I)/2022) increased parental leave for parents of persons with disabilities from 18 to 20 weeks. In addition, the Protection of Maternity Law of 1997 was amended to extend the period during which a mother, for breastfeeding purposes and/or the increased care required for raising a child, may interrupt her work for one hour, arrive at her workplace later, or leave earlier by one hour each day from nine (9) to twelve (12) months starting from childbirth or from the beginning of maternity leave in cases of adoption.
Employment Law Developments in 2026 (So Far)
1| National Minimum Wage Increase
From 1 January 2026, the National Minimum Wage Decree raises the minimum wage to €979 gross on recruitment and €1,088 gross after six months' continuous employment, with proportional adjustments for part-time work.
2| Increase in Maximum Insurable Earnings
As of January 2026, the maximum insurable earnings ceiling has increased pursuant to the relevant Decree. The new limits are set at €5,742 per month (€1,325 weekly), corresponding to annual caps of approximately €68,900–€68,904, resulting in increased social insurance contributions for both employers and employees.
3| Cyprus Tax Reform
Effective 1 January 2026, the personal income tax-free threshold increases to €22,000 with revised marginal rates up to 35%. Mandatory annual tax filings now apply to all Cyprus tax residents over 25, and a new tax regime for ex gratia termination payments offers up to €200,000 tax-free treatment, with excess taxed at 20%.
What We Anticipate in 2026
1| National Pay Transparency Legislation
The national Pay Transparency bill transposing EU Directive 2023/970 is expected to introduce pay transparency and equal pay obligations, enhancing employees' rights to compensation information and strengthening employer reporting and compliance requirements. Please refer to our newsletter on the EU Directive Pay Transparency Directive (EU) 2023/970.
2| Catering & Entertainment Venues Regulatory Reform
A draft bill before Parliament proposes modernising the regulatory framework for restaurants, bars and similar venues, with employment-relevant changes including differentiated operating hours, staffing impacts, enhanced health and safety requirements, and expanded employer responsibilities.
3| Balanced Gender Representation in Executive Management
A draft bill to align with EU Directive 2022/2381 on gender balance in senior management remains at the consultation stage; while non-binding, listed companies should monitor progress for future compliance obligations.
4| Pension Reform Developments
The government plans to submit comprehensive pension reform bills to Parliament by June 2026, under Labour Minister Marinos Mousiouttas, who assumed the portfolio following a recent transition in the Ministry of Labour. The proposed reform aims to address low-income pensioner allowances, reform the social insurance fund's investment policy, and reassess the current 12 % reduction applied to early retirement pensions.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
