Draft law seeks to cap soaring fines for undeclared labor

Unpaid fines for undeclared labor in Cyprus have reached approximately 73 million euros, according to data submitted to the Parliamentary Labor Committee on November 10, 2026. The debt accumulated between late 2017 and September 17, 2026, involves 706 to 758 employers and self-employed individuals. The massive debt is largely due to a current legal provision that imposes a daily surcharge of 50 euros on unpaid administrative fines, causing original penalties to multiply uncontrollably over time.

To address this, the Ministry of Labor has proposed a bill that introduces a ceiling on daily surcharges. While the original estimate suggested the state might write off 58 million euros, updated figures indicate that if the bill is passed, the state would collect 8.6 million euros, effectively writing off 64.3 million euros, or 88.16% of the total debt. The Parliamentary Labor Committee is currently reviewing the proposal to determine if this measure will help rationalize the enforcement system and provide a pathway for debtors to settle their outstanding obligations.

The proposed legislation aims to halt the accumulation of astronomical debts that many offenders are currently unable to repay. The committee continues its deliberations to decide whether this drastic reduction in total debt is an appropriate solution to address the systemic backlog.