Updates of Protection of Wages Law

The Protection of Wages Law of 2007 (the “Law”), as amended in 2022, which is in force as of April 16, 2023, covers the following areas:

• It defines the permissible methods of payment of salaries, and the obligation to issue a certificate of remuneration (payslips) and
• It enhances transparency and predictability of conditions of employment.

Acceptable payment methods of salaries

1. Payment to a bank account or payment account of the employee’s choice
2. Payment by bank cheque in the employee’s name.

Provided that the employee is in the process of opening a bank account, the employer may pay the wages in cash for a period not exceeding four (4) months from the date of employment. The employer may continue to pay wages in cash only in case the request for opening a bank account is rejected. In this case, the employer must provide evidence of the rejection (a relevant attestation from the credit institution that rejected the employee’s application to open a payment account) to the Director of the Department of Labour Relations of the Ministry of Labour and Social Insurance.

Compulsory issue of monthly/weekly payslips

Following the amendment of the Law in 2022, all employers have an obligation to issue payslips on a monthly/weekly basis. The employer (in the case of a company – its directors) is personally liable in case of failure to comply with this requirement of the Law.

Moreover, the Law requires that payslips are issued and circulated to employees within five (5) working days from the date of the payment of wages.

Payslips should contain at least the following information:

1. The following information for both the employer and the employee:

Full name, Address, Identity, Employee’s social insurance number and employer’s registration number.

2. Payment date and Period of payment.
3. Wages payment details (basic salary, overtime, etc.)
4. Employer’s contribution to Social Insurance Funds and other funds
5. Employee’s contribution to Social Insurance Funds and other funds
6. Other information (e.g. cost of living allowance, commissions, etc.)

Terms of Employment: Enhances transparency and predictability of terms of employment.

Some of the most important provisions of the new Law no. 25(I)/2023, which harmonizes national law with EU Directive 2019/1152, is:

• the time allowed for the employer to inform the employee about the terms of employment is reduced to 7 days (instead of 1 month),
• the obligation to refer to the constituent elements of remuneration beyond the basic salary is established,
• in cases of non-fixed working hours, the employer must provide the employee with alternative information such as inter alia, the framework of the working hours within which workers may be called upon to work and guaranteed remuneration.

How we can help you.

• Consulting services for reviewing practices and functions of internal accounting for the processing of Payroll.
• Conducting a monthly payroll from our offices, covering preparation of payroll based on the provisions of the legislation and providing you with salary certificates per employee as well as monthly statements of social insurance contributions, statements of provident fund contributions (where applicable), and employee tax deduction statements (where applicable).
• Services for the process of Recruitment – termination of employees through Ergani. Preparation of relevant letters in accordance with the provisions of the legislation.
• Consulting services for review/ revision of the terms and conditions of employment according to your industry. / nature of your work, for compliance with the provisions of the legislation as a whole as it stands today.
• Consulting services for the determination of policy and terms of employment for the company’s employees. Preparation of written terms and securing a declaration of acceptance by employees.

More information about the two new Laws can be found on the website of the Department of Labour Relations Department of Labour  where the Laws, informative guides and answers to frequently asked questions are posted in their entirety.

Contact us for further information and service quotation: info@fci.com.cy  | tel: (357) 22 673 800