Cyprus Employment Agencies Under Scrutiny. Parliament Investigates Illegal "Lending" of Workers

The Cypriot parliament is investigating the activities of companies that, for a fee, send workers to hotels, restaurants, and construction sites, despite not having the required permits. Trade unions are calling this exploitation and practices resembling "modern-day slavery." Employers, however, emphasize that legal subcontracting should not be equated with illegal labor trafficking.

The Department of Labor reviewed a total of 52 reported cases between 2024 and 2026. In three of these cases, evidence indicated possible violations of regulations. Officials, however, acknowledge that determining the actual employer can be difficult because the formal contract may not reflect the actual employment situation.

One company employs, the other manages the work

A suspicious mechanism might look something like this: an employee signs a contract with one company but is assigned to a hotel, restaurant, or construction company. Representatives of the other company set their schedule, assign responsibilities, and monitor work performance.

The formal employer then bills the employee for "providing" the staff, and the employee receives only a portion of the amount paid. According to trade unions, the employee often doesn't even know how much the company using their labor paid the intermediary.

The majority of applications are from the construction, hotel, and restaurant sectors. In the tourism industry, these jobs are expected to include:

• cleaning workers,
• maids,
• waiters and bartenders,
• cooks,
• kitchen helpers,
• hotel service employees.

Trade unions point out that the highest number of similar cases in the hotel industry were reported in the Ayia Napa and Paphos regions. Reports of such practices have also come from Limassol.

No thirteenth month salary or overtime pay

Individuals assigned to work by unauthorized entities are often billed solely for hours worked. They may not receive benefits under collective agreements, a thirteenth month of pay, pension contributions, or proper compensation for overtime and work on public holidays.

The problem is said to primarily affect third-country nationals, whose position vis-à-vis their employers is particularly weak. However, trade unions report that Pontic Greeks, Greek Cypriots, and Turkish Cypriots are also among those affected.

Employee representatives also describe instances of people being transported by van between construction sites. They believe workers are treated like tools to be transferred between companies for a fee.

Subcontracting is not always illegal

Not every situation in which an employee of one company performs an assignment for another company constitutes a violation of the law. A legal subcontractor remains the actual employer of its employees and is responsible for them.

The problem arises when the company limits itself to charging a fee for providing people, while another entrepreneur takes over complete control of their work.

During inspections, officials check who pays wages, sets working hours, issues daily instructions, provides tools and actually supervises the employee.

Three approved temporary employment agencies

According to information presented during the parliamentary session, there are currently only three approved temporary employment agencies operating in Cyprus.

Cypriot regulations prohibit the assignment of temporary workers to the construction and hotel sectors. This restriction is intended to prevent permanent positions from being replaced by agency workers on less favorable terms.

A legal temporary assignment can last a maximum of four months. This period can be extended, but the total duration of work in a given position should not exceed 12 months.

Once this period has been used up, the company cannot circumvent the regulations by assigning another employee from another agency to the same position.

Operating a private employment agency also requires a permit issued by the Director of the Department of Labor. Merely being listed in the Companies Register does not mean that it can legally provide employment services or provide personnel to other businesses.

What should an employee check?

A person taking up employment in Cyprus should carefully check:

• what company appears in the contract;
• who pays the salary;
• who pays social security contributions;
• who sets the schedule and days off;
• who issues official orders;
• whether the employee receives pay slips;
• whether hours worked and overtime are properly recorded.

It's worth keeping your contract, payslips, transfer confirmations, schedules, and messages containing work orders. If your formal employer exists only on paper, and all employment terms are managed by another company, this may signal a need to clarify matters with the Department of Labor Relations or a trade union.

Parliament is currently awaiting information from the Ministry of Labor on the results of the investigations, any sanctions imposed, and any potential criminal cases. Unions are demanding more inspectors, harsher penalties, and the extension of contractor liability to all workers present on construction sites.

Job seekers can browse current offers and post their own ads on https://ogloszenia.cyprnews.pl/Before responding to an offer, however, it's worth checking the employer's details, contract terms, and salary calculation method.

Sources: Philenews, Politis, Business in Cyprus