Cyprus Moves Ahead With Pay Transparency Directive Implementation: Some Surprises In Draft Bill

Cyprus has published a draft bill to implement the EU Pay Transparency Directive, signalling a comprehensive framework for pay transparency, pay equity and enforcement across both public and private sector employers once enacted.

The draft was released in November 2025 with a short consultation window to 4 December 2025, and with the government aiming for full transposition by 7 June 2026. While the text is likely to be further refined before being finalised, the current draft provides a clear view of the direction of travel and where Cyprus may go further than the Directive in places.

Scope and definitions

The draft adopts a wide definition of "pay", encompassing basic or minimum wages or salary and any other payments or benefits, in cash or in kind, received directly or indirectly in return for work, including variable or additional elements provided for by law, collective agreements or established practice. This breadth will matter for both equal pay analysis and reporting. The draft excludes certain elements from that term, such as payments made on dismissal, lump-sum payments in anticipation of retirement and occupational pension benefits funded through voluntary employee contributions.

Equal value and pay structures

Employers will be required to maintain pay structures capable of demonstrating equal pay for the same work or work of equal value. Equal-value assessments must be grounded in objective, gender‑neutral criteria, expressly including skills, effort, responsibility and working conditions, with appropriate weighting applied to each criterion depending on its relevance for the specific job or position concerned, and with criteria to be jointly agreed where representative bodies exist.

Notably, the explicit reference to weighting in the operative text appears to go beyond the Directive's articles (where weighting is discussed in recitals), signalling a potentially more prescriptive approach to the mechanics of job evaluation in Cyprus.

Transparency in hiring and pay progression

Pre‑hire transparency obligations will require employers to provide candidates with initial remuneration information and any applicable collective agreement terms at a reasonable time before interview, and to ensure vacancy notices and job titles are gender‑neutral. Salary history questions are prohibited. This marginally raises the bar relative to the Directive's baseline and reinforces fairness at the entry point to employment.

Beyond recruitment, employers must make criteria for pay, pay levels and pay progression easily accessible, objective and gender‑neutral, with a limited exemption from the progression‑criteria transparency requirement for employers with fewer than 50 employees.

Worker rights to information and pay secrecy limits

Employees will have a right to obtain information about their own pay level and average pay levels by gender for categories of workers performing the same work or work of equal value. Employers must respond within two months, and employees may seek clarifications; employers are also required to remind employees of this right annually. This mirrors the Directive exactly.

Contractual pay‑secrecy clauses are rendered ineffective insofar as they prevent workers from disclosing their pay for the purpose of enforcing equal treatment, though employers may control the use of average-by-gender information strictly for asserting the right to equal pay.

Reporting, publication and historical data

Employers with at least 100 employees will be required to prepare a gender pay gap report for the previous calendar year, with management confirming accuracy and employee representatives being consulted and given access to methodologies. Employers with 250 or more employees will report annually; those with 100–249 employees will report every three years. Employers with less than 100 employees can report voluntarily.

Reports must be submitted to the Department of Labour Relations of the Ministry of Labour and Social Insurance Monitoring Body, which is expected to publish comparable employer‑level data. The draft frames employer website publication as optional ("may" publish on the website), reflecting the Directive's permissive language on public dissemination routes rather than a hard obligation.

Employers will also have to provide pay gap data for the previous four years upon request, where such data exists. Interestingly, there is no express cap at the transposition date – so potentially reaching back to 2022 - which will have practical implications for data retention and systems.

Triggered remediation and joint pay assessments

Where the pay gap in any "category" of worker reaches at least five per cent and lacks objective, gender‑neutral justification, employers must implement remedial measures within six months from submission of the data, in cooperation with employee representatives. If effective remediation is not achieved within that period, the employer will be obliged to conduct a joint pay assessment. This sequencing mirrors the Directive but gives practical urgency to closing unjustified gaps.

Supervision, enforcement and penalties: guilty until proven innocent?

The draft provides for extensive inspectorate powers to enter workplaces, audit, require information and coordinate with other authorities. Limitation timelines for the filing of industrial dispute claims are paused during complaint handling. The Labour Court may award full compensation, including retroactive payments, related bonuses or in‑kind benefits, loss of opportunity, non‑material damage and interest; obstructing an inspector constitutes an offence.

Additionally, Directors or officers holding a managerial or comparable position may be deemed guilty unless they can prove the offence occurred without their consent, connivance or negligence, raising governance stakes. Criminal penalties can include fines up to €10,000 and/or six months' imprisonment, alongside robust anti‑victimisation and anti‑dismissal protections.

Practical implications for employers

The draft signals a shift from principle to practice in Cyprus, requiring equal‑value frameworks, auditable methodologies and sustained engagement with employee representatives. The combination of structured job‑evaluation criteria (with explicit weighting), regular reporting for larger employers, and a four‑year look‑back on request underscores the need for data‑ready systems and defensible pay architecture. Employers should map roles to objective criteria, test pay policies for neutrality, and prepare for interactions with the Monitoring Body and inspectorate, including methodology disclosure to representatives. Early planning is recommended given the six‑month remediation window after a ≥5% unexplained gap and the prospect of joint assessments if remediation falters.

Points to watch

Two drafting choices merit attention as the bill progresses.

First, the optional framing of public website publication aligns with the Directive's permissive approach, but employer‑level data will still be published by the Monitoring Body, so external visibility should be expected. And, if the Monitoring Body creates an easy to search, filterable system (like the UK gender pay gap reporting service), then potentially public scrutiny might be even greater.

Second, the explicit requirement that objective, gender‑neutral criteria for evaluating jobs and determining "categories" be "weighted" appears to go beyond the Directive's articles, which may indicate a more granular assessment methodology in Cyprus. This will influence how employers in Cyprus should design and document job evaluation or classification.

Timeline and next steps for employers in Cyprus

With consultation having closed in early December and full transposition expected by 7 June 2026, organisations should begin readiness work now, prioritising job evaluation or classification, pay‑structure transparency, reporting pipelines, and governance documentation in order to mitigate enforcement risk and to manage employee‑relations dynamics under the expanded rights to information.

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.