Cyprus labour ministry proposes debt cancellation for undeclared work fines

The Cyprus Ministry of Labour is seeking to address criticisms regarding a proposed legislative amendment that aims to cancel approximately €58 million in debts, penalties, and surcharges related to administrative fines for undeclared work. These debts have accumulated over the past nine years. The ministry has expressed willingness to consider modifications to the bill, which was submitted to Parliament in June 2026.

The proposed legislation seeks to introduce a cap on the increase of administrative fines. Specifically, the accumulated increase due to delays in payment by employers or self-employed individuals would be limited to double the original fine amount. Currently, the existing legal framework imposes a €50 penalty for every day of delay, resulting in total outstanding debts of €65.6 million. The proposed policy would apply retroactively to June 2017, effectively forgiving a significant portion of these accumulated arrears.

While formal parliamentary debate has not yet commenced, several political parties have expressed reservations, fearing that the proposal might provide preferential treatment to certain groups. The House Labour Committee is scheduled to review the bill in detail following the summer recess, where the potential social and economic impact of this debt relief will be scrutinized.