Employer organisations CCCI (Cyprus Chamber of Commerce and Industry) and OEB (Cyprus Employers and Industrialists Federation) have voiced opposition to two proposed measures aimed at tackling undeclared work, during a parliamentary committee meeting on Tuesday.
The Ministry of Labour is pushing for mandatory electronic registration of employees and their employment terms, and an increase in fines for undeclared work from €500 to €1,000, to be issued as out-of-court penalties.
Labour Minister Giannis Panagiotou said undeclared work costs the Social Insurance Fund about €10 million annually and contributes to unfair competition and illegal immigration.
However, OEB’s Assistant General Director, Lena Panagiotou, expressed concern that out-of-court fines would limit employers’ ability to challenge penalties.
CCCI’s Aimilios Michael warned that electronic registration could increase administrative costs and expose businesses to fines for routine changes in working hours.
Trade unions supported the measures, with PEO’s Assistant General Secretary, Michalis Papanicolaou, highlighting significant undeclared work issues in the construction industry.
Citing data from the Ministry of Labour, he highlighted the large wage gap in the sector compared to the terms agreed upon in collective agreements and the existence of wages below the minimum wage. He stated that undeclared and under-declared work is rampant in construction, mainly affecting vulnerable workers and social funds. He emphasised that unless serious measures are taken, negative consequences will continue, contributing to the development of fascist ideologies in society.
The Minister of Labour acknowledged the problem in the construction industry, where undeclared work stands at 12%, while in other sectors is at 8%.
The committee will continue discussions next week, aiming to present the bills to the House Plenary by month-end.
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