Hiring guide in Cyprus

What should I know about hiring in Cyprus?

Many multinational corporations have begun looking at Cyprus as their primary choice for establishing a presence there since 2004. Those who choose to work in Cyprus will find an atmosphere similar to that of other developed European countries, with the added plus of significantly lower personal taxation.

In addition, every worker has the right to a formal written employment agreement outlining their job responsibilities, compensation, and duration of employment. Finally, it is essential to note that employees in Cyprus are protected by several regulations that ensure they have access to a secure and healthy workplace, receive reasonable compensation for their time and effort, and can organize if they want.

You must also contribute to your employees’ social security fund as an employer. Pension, health insurance, and unemployment insurance are all covered by Cypriots’ social security contributions.

Why is Cyprus a good choice for finding remote employees?

Modern, service-based, and free-market, Cyprus’s economy provides international and domestic investors and businesses with a wide variety of opportunities for development, expansion, and profit maximisation. 

Cyprus’s convenient tax structure and reliable economic stability make it an excellent location to operate internationally. In addition, an impressive number of Cypriot people have completed postsecondary education, making for a highly educated and talented labour population. 

Therefore, companies wishing to establish themselves or extend their current business would consider this country. Furthermore, many financial and other benefits are available to the companies that relocate to Cyprus because of the government’s openness to international investment.

How can Native Teams help you hire in Cyprus?

In order to stand out in the increasingly competitive market for remote workers in Cyprus, businesses are offering more generous benefits and salary packages to prospective employees. An approach that can help is collaborating with Native Teams. With our Employer of Record services, Native Teams can help you hire new staff, onboard them into your company, and ensure that they are paid, taxed, and provided for in accordance with Cyprus legislation.

 Hire your first Cyprus employee with Native Teams.

Legal requirements for hiring in Cyprus

When hiring new team members in Cyprus, it’s important to follow the labour laws outlined in the section below.

Legal framework

Types of employment contracts

In Cyprus, there are two types of employment contracts: indefinite and definite contracts. 

Indefinite contracts are open-ended with no set end date, providing employees with long-term job security and stability. Typically used for permanent roles, they come with a range of statutory benefits and protections. Under these agreements, employees are entitled to annual leave, sick leave, and social insurance contributions as required by Cypriot employment law.

Fixed-term contracts have a specified start and end date, making them suitable for temporary roles, seasonal work, or specific projects with a defined timeframe. In Cyprus, the probation period is capped at a maximum of 6 months, with a recommended average of 3 months for all companies. These contracts end automatically when the period specified is over, unless both parties agree to renew or extend it.

Content of an employment contract

An employment contract must include several key elements to meet legal requirements. Firstly, it should identify both the employer and the employee, providing their full legal names and addresses. The contract must also specify the main location where the employee will work and include the registered address of the employer’s business.

It should describe the employee’s job title, role, or specific area of expertise, outlining the position for which they are hired. Moreover, the contract must state the employment start date and, if it is for a fixed term, the duration of the contract.

Notice periods required for termination by either party must be detailed in line with relevant laws. The contract should also specify the employee’s entitlement to annual leave, including the number of days and any applicable conditions.

Compensation details, including salary, bonuses, and other financial benefits, along with the payment schedule, must be clearly outlined. The usual working hours, whether daily or weekly, and any expectations for overtime, should also be defined. Lastly, the contract must acknowledge any relevant collective bargaining agreements that could influence the terms and conditions of employment.

 Download a free employment contract for Cyprus through Native Teams.

Oral, written or electronic employment contracts

The terms and conditions of employment must be carefully documented in writing, serving as a clear record of the agreement between the employer and employee.

This documentation can take several forms, such as a detailed written contract outlining all the terms, rights, and obligations of the employment relationship. It may also include a formal letter of engagement that clearly states the essential terms and conditions of the job. Alternatively, any legally recognised document signed by both parties that meets the minimum requirements specified under relevant employment laws can serve this purpose.

Employers are required to provide these terms and conditions to the employee within one month of the employment start date. If there are any changes to these terms, the employer must issue written notice within one month of the changes taking effect to maintain transparency and comply with legal standards.

Working hours

In Cyprus, the standard full-time workweek is capped at 40 hours to protect employees from excessive work and support their well-being. This limit applies unless specified otherwise by law, a collective agreement, an arrangement between the employer and the works council, or the individual employment contract.

Part-time employment in Cyprus is any arrangement with fewer working hours than a full-time role. Part-time workers have similar rights and protections as their full-time counterparts, including entitlements related to working hours and overtime.

Night work

Night work is regulated by labour laws, which define it as any work carried out between 8:00 PM and 6:00 AM. Employers must adhere to specific rules regarding night work, often including provisions for additional compensation or benefits for employees working during these hours.

Employees on night shifts are entitled to extra compensation or benefits as outlined in labour laws or collective agreements. This can include higher hourly pay, night shift allowances, or additional days off to account for the difficulties of working during unsocial hours.

Breaks and types of leaves

Employees working at least 6 hours a day are entitled to a rest break of at least 15 minutes during each workday, unless specified otherwise by a particular law. This break cannot be taken at the beginning or end of the workday.

For daily rest, employees are entitled to at least eleven continuous hours of rest within every 24-hour period. Additionally, each worker is entitled to a weekly rest period lasting a minimum of 24 consecutive hours.

If the employer chooses, the worker may instead have, over a 14-day period, either two separate 24-hour rest periods or one continuous 48-hour rest period.

Annual leave

According to Cyprus employment law, employees are entitled to a minimum annual vacation of 4 weeks per calendar year. This equates to 20 working days for those on a 5-day workweek and 24 working days for those on a 6-day workweek. This requirement sets a baseline to ensure employees have sufficient time to rest and recharge.

Public holidays

In Cyprus, public holidays are an integral part of annual leave entitlements, and employees are usually given time off on these days. The public holidays observed in Cyprus include New Year’s Day on January 1, Epiphany on January 6, and Green Monday, which falls 50 days before Greek Orthodox Easter. Greek Independence Day is celebrated on March 25, followed by Cyprus National Day on April 1.

The Greek Orthodox calendar also determines the dates for Good Friday, Easter Monday, and occasionally Easter Tuesday. Labour Day is observed on May 1, while Pentecost (Kataklysmos) occurs 50 days after Greek Orthodox Easter. Other public holidays include the Assumption Day on August 15, Cyprus Independence Day on October 1, Ochi Day on October 28, and both Christmas Day and Boxing Day on December 25 and 26, respectively.

Salary

In 2024, Cyprus is set to implement a new minimum wage structure that will benefit over 25,000 full-time workers across various industries. This initiative aims to promote fair compensation and strengthen economic stability within the labour market. Starting from January 1, 2024, all full-time employees must receive a minimum gross monthly wage of at least €1000.

To calculate the salary and taxes in Italy, click here.

Parental leave

Employed or self-employed parents are entitled to 18 weeks of parental leave, which can be used until their child turns 8, provided they have completed 6 consecutive months of employment with the same employer.

This leave can be taken in segments, ranging from a minimum of one day to a maximum of 5 weeks within a calendar year. Plus, insured, employed parents receive parental leave benefits during this period.

Paternity and maternity leave

New fathers are eligible for two weeks of paternity leave, which can be taken within 16 weeks following the child’s birth. Fathers who have been employed for at least six months also have the option to take up to 18 weeks of unpaid leave due to childbirth or adoption.

For adoptive fathers, the allowance covers a period of two consecutive weeks, which can be taken anytime between the week of adoption and the following 16 weeks.

Eligible fathers are entitled to receive 72% of their salary as paternity benefit during this leave. However, if the individual is already receiving their full salary while maternity allowance is being provided, the paternity benefit will not be paid. If they receive a partial salary, the combined amount of the salary and the benefit cannot exceed their full wage.

Methods of employment termination

Modes of terminating an employment contract in Cyprus vary depending on the circumstances. One way a contract ends is through the death of the employee. In such cases, the contract is automatically terminated as it becomes impossible for the deceased party to fulfil their contractual obligations. 

Similarly, if the employer is a natural person and passes away, the contract ceases due to the impossibility of maintaining the employer-employee relationship. However, if a successor or estate takes over the business, the employment relationship may continue under the new authority.

Another mode of termination occurs when a fixed-term contract reaches its expiry date. The contract concludes at the end of the specified duration unless both parties explicitly agree to extend or renew it, either verbally or in writing. Contracts also terminate when an employee reaches the statutory retirement age of 65, unless there is an agreement in place to extend employment beyond this age, in compliance with relevant laws and regulations.

Termination can also happen through mutual agreement between the employer and employee at any time. This mutual decision must be documented in writing, signed by both parties, and should include any terms related to the termination, such as severance pay or the continuation of certain benefits. Employers may also terminate the contract through dismissal, but this must comply with legal standards. Dismissal typically requires the employer to provide a valid reason, adhere to due process, and meet any notice periods or severance requirements as outlined by employment law or the employment contract.

Finally, a contract can be terminated by a judicial decision from the Labour Disputes Court. Such a decision may arise from disputes over the legality or fairness of a dismissal, non-payment of wages, or other employment-related conflicts, and the court’s ruling is binding on both parties.

Ordinary dismissal by employer

An indefinite-term employment contract can be ended by the employer at any time, provided that proper notice is given. When dismissing an employee, the employer must issue a written notice directly to the employee, which should include an explanation for the dismissal if one is provided.

Regarding redundancies, employers can terminate an employee’s contract for business-related reasons. These can include economic, technical, or organisational changes, such as a decrease in production, the introduction of new technologies, or shifts in market conditions. In these situations, terminating certain positions may be necessary for the company to continue operating efficiently.

However, even in cases of redundancy, the employee’s right to compensation is safeguarded under the Termination of Employment Law, ensuring they receive appropriate compensation as stipulated by law.

Notice period and challenging the dismissal

When an employer intends to dismiss an employee who has completed at least 26 weeks of continuous employment, they must provide a minimum written notice period. The length of this notice depends on the employee’s duration of service. 

For employment lasting between 26 and 51 weeks, the notice period is 1 week. For those employed between 52 and 103 weeks, it increases to 2 weeks. Employees with 104 to 155 weeks of service are entitled to 4 weeks’ notice, while those with 156 to 207 weeks receive 5 weeks’ notice. The notice period increases incrementally, reaching up to 8 weeks for employees with 312 or more weeks of continuous service.

In cases of extraordinary dismissal, no notice period is required. Similarly, the employer is not obliged to give notice during the probationary period, provided the probationary period does not exceed 104 weeks. If it extends beyond this, notice is only waived if the probationary period was agreed upon in writing at the time of recruitment.

For an employee wishing to resign, a notice period must also be given to the employer. The required notice depends on how long the employee has worked for the employer. For employment between 26 and 51 weeks, a 1-week notice is required. This increases to 2 weeks for employment, lasting from 52 to 259 weeks, and 4 weeks for those employed for 160 weeks or more. Additionally, the employer can compensate the employee with payment in lieu of the notice period.

Rights and obligations of unemployed individuals

Unemployed individuals are eligible for financial compensation if they have completed at least 26 weeks of continuous work. This requirement ensures that workers who have maintained steady employment during this period qualify for unemployment benefits, providing a safety net during unemployment. These benefits offer essential temporary financial support and stability as individuals search for new job opportunities.

Unemployment benefits are available to workers aged 16 to 63. This age range includes young individuals entering the workforce for the first time, as well as older workers approaching retirement. Additionally, if an insured person is not entitled to a statutory pension, the benefit limit extends to age 65.

Severance pay

Severance pay is a monetary sum the employer provides to an employee whose employment contract is terminated after 26 weeks of continuous work. This payment serves to ensure some level of income for the employee and to lessen the negative impact of the contract’s termination.

However, an employee is not entitled to severance pay if they are terminated for specific reasons. These include cases of redundancy, termination due to circumstances like force majeure, war operations, political unrest, natural disasters, or destruction of the workplace by fire not caused by the employer’s deliberate actions or negligence. 

In addition, no compensation is owed if the employment ends when a fixed-term contract concludes or when the employee reaches the standard retirement age as outlined by law, customs, collective agreements, or workplace rules.

Probationary period

In Cyprus, the standard probationary period is up to 6 months. However, this can be extended to a maximum of 2 years if both the employer and employee agree in writing.

When the probation period is extended, its length must be appropriate in relation to the expected duration of the employment contract and the nature of the work the employee is performing.

If the employee fails to meet the job requirements during this trial period, it provides a valid reason for terminating the employment contract. The contract can be terminated by the employer at any point during the probation period, but no later than the last day of this period.

Intellectual property rights

In Cyprus, intellectual property (IP) rights within the realm of employment law are largely governed by contractual agreements between employers and employees. It is important for both parties to have a clear understanding of the legal principles related to IP rights in this context.

By default, Cypriot law states that IP rights created by an employee during their employment usually belong to the employer. This rule applies especially to creations developed as part of the employee’s duties or those that align with the employer’s business activities. These IP rights can include copyrights, patents, trademarks, and other proprietary works generated in the course of employment.

However, these default rules can be adjusted through contractual agreements. Employers and employees can negotiate specific terms in employment contracts or separate agreements that define the ownership, use, and exploitation of IP rights. These negotiated terms take precedence over the standard legal position, allowing both parties to customise IP rights arrangements to meet their unique business needs and objectives.

Employee data privacy

In Cyprus, employee data privacy is primarily regulated by the General Data Protection Regulation (GDPR), as the country is a member of the European Union. Several key aspects define this framework:

A legal basis must be established for processing an employee’s personal data, which could include the fulfilment of the employment contract, compliance with legal obligations, protection of vital interests, consent (though this is rarely used in employment contexts), or legitimate interests.

Employers are also required to inform employees about the specific purposes for data collection and processing, including any automated decision-making that could significantly impact them.

Prohibition of competition

An employee is prohibited from engaging in any business related to the employer’s activities, whether for personal gain or for someone else’s benefit, without the employer’s consent. This restriction serves as a legal prohibition of competition.

If the employee violates this prohibition, the employer has the right to seek compensation for any damages incurred or to demand that the work performed be considered as conducted on the employer’s behalf. In such cases, the employee may be required to hand over any earnings from that work to the employer or transfer the claim to those earnings.

Remote working policy

Working from home, at a designated separate workspace, can be arranged in various ways: as a permanent setup, a temporary solution, or on an occasional basis.

This arrangement is based on an agreement between the employer and employee, which can be initiated by either party. This agreement’s feasibility depends on the work’s specific nature and associated risks, as determined by the relevant occupational safety regulations.

Responsibilities within a remote work arrangement

When an employee requests an amendment to their employment contract to allow working from home, the employer must respond. The employer can only reject the request for a valid reason, which must be provided in writing to the employee. If the contract is amended temporarily to permit remote work, the employee has the right to propose returning to work at the employer’s premises before the agreed-upon period ends.

Employees working remotely must receive a salary and other benefits that are not less than those provided to employees performing similar jobs at the employer’s premises. Plus, the employer must adjust the workload and deadlines to ensure that the employee can still take their daily, weekly, and annual leave in accordance with the agreed-upon terms.

Health and safety at home

employers are required to conduct risk assessments of the home workspace to identify potential hazards and take steps to address them. They must provide appropriate equipment, such as ergonomic office furniture and computers, and ensure that these tools are used safely. 

Employers are also responsible for offering training and sharing information on health and safety practices related to working from home. Additionally, they must continuously monitor the homework environment and support employees in addressing any health and safety concerns.

What are the advantages of hiring employees from Cyprus vs other countries?

Hiring employees from Cyprus offers several distinct advantages compared to other countries. Cyprus’s geographical location at the crossroads of Europe, Asia, and Africa provides Cypriot employees with a unique blend of cultural awareness and language proficiency, especially in English, which is widely spoken and used in business.

It also has a favourable time zone (EET/EEST) that aligns well with both European and Middle Eastern markets, facilitating smooth communication and collaboration for companies operating across multiple regions.

Finally, Cyprus offers a favourable legal and regulatory framework for employment. The country has well-established labour laws that balance employee rights with employer flexibility. This creates an environment where businesses can confidently hire employees, knowing they can structure employment terms effectively.

Why use Native Teams for hiring in Cyprus?

Native Teams lets you employ team members ‘like a local’ meaning you get all the benefits of a global team, wherever you are based. Here are the reasons why you should use Native Teams for hiring:

• No paperwork: We will handle all the necessary paperwork for you.
• Save on taxes: We help you handle your taxes.
• No company set up: You can expand your business using our company entitles.
• Online onboarding: We’re here to ensure your onboarding process is trouble-free.
• No accounting: We will handle all of your accounting needs, including invoicing, payroll, and more.
• Increase your profit: We assist you in growing your business and maximizing your profits.
• Compliance expertise: we can assist your company in navigating the regulatory environments and ensure you meet all relevant requirements.
• Local support: We can assist you in understanding and complying with the relevant local laws.