Employment Law in Cyprus 2026: Key Reforms, Changes and What Employers Should Prepare For
Cyprus employment law is undergoing one of its most active reform periods in recent years. A series of legislative changes introduced throughout 2025, combined with substantial measures that entered into force in 2026 and further reforms expected later this year, are reshaping employer obligations and employee rights across multiple areas.
This article highlights the most important developments employers, HR professionals, and in-house legal teams should be aware of — as well as what lies ahead.
A. Major Employment Law Developments Introduced in 2025
Mandatory ERGANI Registration of Employment Terms
Following the adoption of the 2024 Decree on Transparent and Predictable Terms of Employment, employers were required to register the essential terms of employment for all employees through the ERGANI electronic system. This marked a significant step toward increased transparency, digital monitoring, and regulatory oversight of employment relationships. Failure to comply carries administrative and enforcement risks, making accurate and timely registration essential.
Strengthened Protections Against Workplace Violence and Harassment
Law 42(I)/2025 substantially upgraded the legal framework governing violence and harassment at work. The scope of prohibited conduct was expanded, employee protections were reinforced, and employers are now required to adopt clear zero-tolerance policies, internal reporting mechanisms, investigation procedures, and support measures for affected employees. The law reflects Cyprus’ alignment with international and EU standards on dignity and safety at work.
Teleworking Framework Developments
Teleworking continues to evolve on both public and private sector fronts. Law 215(I)/2025 introduces a structured telework regime for public sector employees and will come into force in April 2026. It regulates eligibility, supervision, rights, and operational continuity.
In parallel, private sector teleworking remains governed by the 2023 Remote Working Law, although the long-awaited Ministerial Decree on reimbursable costs payable by employers is still pending and expected imminently.
Cost of Living Allowance (COLA) Adjustments
An agreement reached between social partners in 2025 provides for the gradual reinstatement of COLA, with effect from 1 January 2026. While primarily impacting the public sector, the agreement also has implications for private sector employment contracts that reference COLA arrangements linked to public sector practices.
Family-Friendly and Work–Life Balance Enhancements
A number of family-related protections were strengthened during 2025. New breastfeeding regulations, scheduled to take effect in July 2026, impose minimum requirements for breastfeeding facilities in workplaces and public spaces.
Additionally, amendments to work–life balance legislation increased parental leave entitlements for parents of persons with disabilities and extended the period during which mothers may benefit from flexible working time arrangements for breastfeeding and childcare purposes.
B. Key Employment Law Changes Already in Force in 2026
Increase in the National Minimum Wage
From 1 January 2026, the national minimum wage increased to €979 gross upon recruitment and €1,088 gross after six months of continuous employment. Employers must ensure payroll compliance, including proportional adjustments for part-time employees.
Higher Social Insurance Contribution Thresholds
The maximum insurable earnings ceiling was revised upward as of January 2026, resulting in higher social insurance contributions for both employers and employees. The new caps apply on a monthly, weekly, and annual basis and should be factored into workforce cost planning.
Tax Reform with Employment Impact
The 2026 tax reform package introduced significant changes affecting employees and employers alike. These include an increased personal tax-free threshold, revised income tax bands, mandatory annual tax filings for Cyprus tax residents over 25, and a new favourable tax regime for certain termination payments. Employers should review payroll structures, termination arrangements, and compliance processes accordingly.
C. Legislative Developments to Watch in 2026
Pay Transparency and Equal Pay Obligations
Cyprus is expected to transpose the EU Pay Transparency Directive, introducing new obligations on pay disclosure, reporting, and equal pay enforcement. Once adopted, employers will face increased scrutiny over remuneration structures, hiring practices, and internal pay gaps.
Reform of Catering and Entertainment Venue Regulation
Proposed legislation aims to modernise the regulatory framework governing restaurants, bars, and similar venues. The changes may affect operating hours, staffing requirements, health and safety compliance, and broader employer responsibilities in the sector.
Gender Balance in Executive Leadership
Draft legislation aligned with EU gender balance initiatives remains under discussion. While currently non-binding, listed companies and larger organisations should monitor developments to anticipate future governance and compliance requirements.
Pension System Reform
The government has announced plans to submit comprehensive pension reform proposals during 2026. The reforms are expected to address pension adequacy, early retirement penalties, social insurance fund investment policy, and low-income pensioner support.
D. How We Can Support You
The pace and breadth of employment law reform in Cyprus require proactive compliance and strategic workforce planning. Employers are encouraged to review employment contracts, internal policies, HR procedures, and payroll structures to ensure alignment with current and upcoming obligations.
Our Employment Law team is available to assist with tailored advice, compliance reviews, policy drafting, and practical guidance on how these developments may affect your organisation and workforce.
Feel free to contact us for further professional assistance.
Disclaimer: The information contained in this article is provided for informational purposes only, and should not be construed as legal advice on any matter. Andria Papageorgiou Law Firm is not responsible for any actions (or lack thereof) taken as a result of relying on or in any way using information contained in this article and in no event shall be liable for any damages resulting from reliance on or use of this information.
