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The new law establishing an Inspection Service at the Ministry of Labour, Welfare and Social Security in Cyprus: what is changing and what you need to know

Written by
George Z. Georgiou & Associates LLC, recognised in Cyprus and abroad as a leader in employment and pensions law.
From 1 January 2021, new legislation enters into force in Cyprus, aimed at effectively inspecting whether 30 different pieces of legislation on matters that fall under the jurisdiction of the Ministry of Labour, Welfare and Social Insurance are being correctly implemented.

To achieve this goal of monitoring implementation of labour welfare and social security laws, an Inspection Service is being established under the supervision of the Ministry of Labour. This Service will conduct targeted inspections and monitoring of the implementation of the legislation and will examine complaints and grievances. In addition, it will provide information and advice to employers and employees.

One of the most important changes brought by the new legislation is that, in addition to the criminal prosecutions already available in the event of breaches of each legal provision separately, the Service will be able to issue administrative fines against employers for violation of certain articles of the legislation. However, no administrative fine will be imposed in the event of a criminal prosecution for violation of the same provisions.

If an infringement is found during an inspection, the offender will be served with a reasoned Notice of Infringement and will have 15 days to prove that they did not commit the infringement of which they are accused. If they fail, a Fine Imposition Act will be issued and they will be fined administratively. There is a possibility for an objection by the offender, within 15 days.

It is also important to note that the deadline for payment of the fine is 30 days from its issuance. If offenders pay within 30 days, they will benefit from a reduction of 30%. This reduction must be taken into account when the offenders are considering lodging an objection as the time limit is not frozen and therefore, if the objection is not successful, they may not be able to benefit from the reduction. In case of late payment there will be an increase of EUR 50 for each day of delay unless an objection has been lodged.

Specifically, the new law provides for a fine of EUR 500 for violating the provisions described in Table I of the law (these include termination of an employee during the protected period relating to motherhood or upon application for parental leave).

The law also provides for a fine of EUR 250 euros for violation of provisions related to record keeping obligations, protection of wages and informing employees about their basic employment conditions.

These amounts apply to each employee affected and the administrative fine can be up to a maximum total amount of EUR 5,000 euros or EUR 10,000 euros if the same violation is repeated.

Nadia Tryfonidou
Partner - Cyprus
George Z. Georgiou
& Associates LLC