Disputes over pay may concern an overdue salary, a deduction from wages or a 13th salary that an employer has stopped paying. This FAQ explains the position under Cyprus law and the steps employees can take to recover money owed. It also addresses the restrictions employers must observe when changing pay or making deductions.
The main legislation is the Protection of Wages Law, Law 35(I)/2007, as amended. Employment agreements, established payment practices and sector-specific rules also affect entitlement, particularly to a 13th salary, commission and overtime pay.
What can an employee do about unpaid salary?
The employee should write to the employer identifying the unpaid salary and the amount outstanding, and request payment by a specified date. Any response acknowledging the debt or promising payment should be retained.
Payslips, bank statements and employment terms will help establish the claim. Where payments were made in instalments, the outstanding balance should be recorded for each month. A payslip alone does not prove that the wages were paid.
An employee can complain to the Department of Labour Relations while still employed. Resignation is not a condition for claiming unpaid wages.
Can an employer reduce salaries because of financial difficulties?
An employer cannot reduce an agreed salary merely because the business is struggling. A proposed reduction should be agreed with the employee, subject to any applicable collective arrangements and statutory requirements. Wages already earned cannot simply be recalculated at a lower rate.
An employee who has not agreed to a reduction should object in writing. Any proposed revised terms should be checked for provisions affecting salary already owed. An agreed salary must still meet the applicable statutory minimum.
When may an employer deduct compensation for damage from wages?
An ordinary mistake does not, by itself, justify a deduction. Section 10 of the Protection of Wages Law permits deductions for damage to the business caused deliberately or through gross negligence, subject to the statutory procedure.
The employer must first consult the employee representatives or, if there is no recognised representation mechanism, the employee. The consultation covers the amount and how it will be paid. If the dispute remains unresolved, it goes to the Ministry for mediation. If mediation fails, the Ministry refers it to the Industrial Disputes Tribunal.
The Law permits certain other deductions, including tax and social insurance, court-ordered payments, deductions under pension, provident or medical fund rules, and those covered by applicable collective arrangements or the employee’s signed written consent. Deductions are also limited so that the employee can support themselves and their family.
Is a 13th salary compulsory in Cyprus?
Not every private-sector employee in Cyprus is entitled to a 13th salary. It is payable where it has been agreed individually or through a collective agreement, or has become an established practice of the employer.
Hotel employees covered by the relevant regulations have a statutory entitlement that took effect on 1 August 2025. Payment is due by 20 December.
Can a 13th salary become payable through established practice?
A written contract is not the only evidence of entitlement. Previous payslips, bank payments and announcements to staff may establish a practice of paying a 13th salary. The absence of a contractual clause does not necessarily make payment optional.
A genuinely discretionary bonus may be treated differently, depending on what was promised and how it was paid in previous years. Describing an established salary benefit as a “bonus” does not, by itself, make it discretionary.
Is a proportionate 13th salary payable when employment ends?
The Department of Labour Relations states that, where an agreed 13th salary forms part of remuneration, a proportionate payment is due when employment ends before the normal payment date, unless the written employment terms or applicable collective agreement expressly provide otherwise.
The written terms governing departure before the payment date should be checked alongside previous practice. Sector-specific rules may also apply. Covered hotel employees are entitled to a proportionate payment on resignation or dismissal after at least one month’s service.
Can final wages be withheld if an employee leaves without notice?
An employee who leaves without giving the required notice may face a claim by the employer. This does not give the employer an automatic right to retain wages already earned. Any deduction must have a lawful basis.
The employee should request a final account showing earned wages and each deduction. A contractual clause relied on by the employer must comply with the wage-protection rules.
How are unpaid commission and overtime assessed?
The commission agreement should establish when the payment is earned, which may depend on completion of a sale or receipt of the customer’s payment. Agreed standard monthly commission forms part of pay and must be paid. The scheme and relevant sales records will be needed to calculate the amount due.
An overtime claim requires evidence of the hours worked and the applicable rate. The Department of Labour Relations states that overtime must be compensated at least at the ordinary rate, with the arrangements recorded in the employment terms. A higher agreed rate or sector-specific legislation may apply. Where overtime is included in the salary, the extra hours must be defined.
Can non-payment of wages justify resignation?
Serious non-payment or a substantial unauthorised salary reduction may justify a constructive dismissal claim. Section 7 of the Termination of Employment Law, Law 24/1967, treats a lawful resignation caused by the employer’s conduct as termination by the employer.
The employee must prove that the resignation was legally justified; section 7 presumes otherwise until the contrary is established. Advice should be obtained before resigning or ceasing work, as the employee will need to show both that the conduct justified resignation and that it caused the decision to leave.
Where can an employee pursue a wage claim?
The Department of Labour Relations can investigate a complaint under the Protection of Wages Law and attempt to settle it, provided the matter has not already been brought before a court. Civil disputes under that Law fall within the jurisdiction of the Industrial Disputes Tribunal. Breaches can also lead to criminal proceedings.
The deadline for bringing a claim should be checked promptly, particularly where a dismissal claim is also contemplated. Under section 16(5), applicable time limits are interrupted from submission of a complaint through the statutory procedure until the inspector prepares the report recording that the dispute has not been settled, subject to other laws. An informal enquiry or correspondence with the employer should not be relied on to preserve a deadline.
This article provides general information on Cyprus law as at 2 November 2026. It is not advice on an individual employment dispute.
Our Services
A.Danos & Associates LLC advises employers and employees on wage disputes, including unpaid salaries, unlawful deductions and entitlement to a 13th salary, commission or overtime. We review employment terms and payment records, pursue or defend claims, and represent clients in settlement negotiations and proceedings before the Industrial Disputes Tribunal.
For advice on an employment matter in Cyprus, please contact our team.
