Cyprus possesses a well-trained and versatile labour force. Qualified professional, technical and clerical staff, with wide experience and fluency in English and other languages are available for employment at reasonable remuneration.
Economically active population
According to Eurostat’s Labour Force Survey 2012, Cyprus exhibits an employment rate of 64.6% for the age class 15-64; the rate is among the top 14 EU member states and above the average employment rate of the EU-27 (64.2%).
The employment in the market services sector accounts for the largest percentage of the Cyprus total economic activity (48.0%), while the industry and agriculture account for a percentage of 20.2% and 2.9% respectively.
Notably, Cyprus has the highest employment rate for women of 48.7% for the market services sector.
Since Cyprus' accession to the European Union, the EU's acquis regarding labour law has been fully adopted and implemented. Cyprus has a strong tradition of social dialogue and free collective bargaining.
Terms and conditions of employment are mainly regulated by the use of collective agreements, or directly between the employee and the employer. Approximately 50% of the labour force belongs to a trade union, whilst collective agreement coverage approximately 55%. Collective agreements regulate employment conditions such as remuneration, working hours, annual leave, provident funds, health and safety issues, etc.
Every person gainfully occupied in Cyprus, either as an employed person or as a self employed person, is compulsorily insured under the Social Insurance Scheme.
In case of employed persons, the contribution is 20,2% on their insurable earnings and it is divided to contributions paid by the employer, the employee and the State in the proportion of 7,8%, 7,8% and 4,6%, respectively. In case of self employed persons, the contribution is 16,9% on the insurable income of the person concerned. Out of 19,2%, 14,6% is paid by the self employed himself and 4,6% by the State.
In the case of voluntary contributors, the contribution is 17,1% on the earnings amount declared. Out of the 17,1%, 13% is paid by the voluntary contributor himself and 4,1% by the State. Voluntary contributors working abroad in the service of Cypriot employers pay contributions of 15,6% on either the basic insurable earnings or on their normal earnings, as agreed in the respective contract of employment, up to the maximum insurable earnings. An additional contribution of 4,6% is paid by the State.
The social insurance scheme provides for several benefits, such as the maternity allowance, sickness allowance, unemployment allowance, pension, widow’s pension, orphan’s allowance, allowances for industrial accidents and occupational diseases. The new EU Regulations (EC) 883/04 and (EC) 987/09 that coordinate the Social Security Systems between member states, have been put into effect in the Republic of Cyprus as of 01/05/2010.
In addition, employers are also obliged to contribute 1,2% to the Redundancy Fund, 0,5% to the Human Resources Development Fund and 2% to the Social Cohesion Fund.
In case of dismissal of employees due to redundancy, employees who have been continuously employed for 104 weeks by the same employer, are protected by the Redundancy Fund. The illegally dismissed employee is entitled to compensation payable by the employer, provided that the employee has been consistently working for 26 weeks.
In the event of insolvency, the Law on Protection of Employees Rights in case of insolvency of the Employer, provides for the payment of wages / salaries and annual leave to employees due from the employer out of a special fund.