Cyprus parliament reviews bill to cap excessive fines for undeclared labor

The Cypriot Parliamentary Labor Committee is reviewing a government-proposed amendment to the Social Insurance Law aimed at restructuring fines for undeclared labor. Current legislation imposes a daily penalty of €50 for late payments, which has caused initial fines of €5,000 or €10,000 to balloon into hundreds of thousands of euros over several years. Ministry of Labor representatives cited cases where debts grew to as much as €200,000, leaving employers unable to pay and the state unable to collect revenue.

To resolve this, the proposed legislation introduces a cap ensuring that total surcharges cannot exceed twice the original fine. If passed, the measure will be applied retroactively to June 2017. Officials from the Ministry of Labor, including Senior Social Insurance Officer Giorgos Rokopos, suggest that this reform could reduce total outstanding debts from an uncollectible €65 million to approximately €8 million. The committee is now evaluating the proposal to finalize the legal framework and alleviate the financial burden on employers and self-employed individuals.