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Illegal Employment on the Rise in Cyprus as Undeclared Work Declines

by THEFUTURE.TEAM

September 16, 2024

A recent report on the labour market in Cyprus has revealed a worrying increase in illegal employment, even as the rate of undeclared work shows signs of decline. The findings, which were discussed during a parliamentary session, have raised concerns among lawmakers and authorities alike about the ongoing challenges in combating labour exploitation and maintaining fair employment practices.

According to data presented by the Ministry of Labour, the issue of illegal employment—workers being hired without proper work permits or contracts—has escalated in recent months. This rise comes at a time when efforts to reduce undeclared work, where employees are not registered or insured, have seen moderate success. Despite progress in regulating the labour market, illegal employment remains a significant issue, especially in industries such as construction, agriculture, and hospitality.

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Understanding the Distinction Between Illegal and Undeclared Employment

Illegal employment refers to the hiring of individuals who are not legally permitted to work, often due to their immigration status or lack of proper documentation. These workers are typically vulnerable to exploitation, receiving lower wages and lacking access to basic protections such as healthcare and social security benefits. In contrast, undeclared work involves the employment of individuals who may be legally allowed to work but are not officially registered, depriving them of insurance coverage and other legal protections.

While authorities have made strides in reducing undeclared work, particularly through stricter inspections and penalties, the rise in illegal employment presents a new challenge. Lawmakers pointed out that illegal employment poses even greater risks, as it not only harms the workers involved but also undermines the integrity of the labour market and contributes to unfair competition among businesses.

Factors Driving Illegal Employment

Several factors contribute to the increase in illegal employment, according to the Ministry of Labour. One key driver is the influx of migrant workers, many of whom lack the necessary documentation to work legally in Cyprus. Without proper channels for legal employment, these individuals often turn to unregulated jobs where they are vulnerable to exploitation.

The growing demand for cheap labour, particularly in sectors like construction and agriculture, also plays a significant role. Employers seeking to cut costs may resort to hiring illegal workers, bypassing the legal requirements for contracts, wages, and benefits. This practice not only puts workers at risk but also creates an uneven playing field, where businesses that comply with legal standards struggle to compete with those exploiting illegal labour.

Efforts to Combat Illegal Employment

In response to these findings, the government has pledged to intensify its efforts to combat illegal employment. This includes increasing inspections, imposing harsher penalties on employers found guilty of hiring illegal workers, and strengthening collaboration with immigration authorities. Additionally, there is a push to create more pathways for legal employment for migrant workers, ensuring they can enter the labour market with proper documentation and protections.

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Only 63.9% Of Young Cypriots Have Basic Digital Skills, Eurostat Finds

Cyprus continues to lag behind the European Union average in digital skills among young people, even as the bloc records steady progress in digital literacy. New Eurostat data released on Wednesday also show that Cyprus has the widest gender gap in the EU, with young women significantly outperforming young men.

Cyprus Falls Short Of The EU Benchmark

According to Eurostat, 63.9% of Cypriots aged 16 to 24 had at least basic digital skills in 2025, well below the EU average of 74.6%.

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Across the bloc, nearly three-quarters of young people have reached at least a basic level of digital competence, reflecting the growing importance of digital skills in education, employment and everyday life.

Nordic And Central European Leaders Set The Pace

Denmark recorded the highest share of digitally skilled young people, at 92.1%, followed by the Czech Republic with 91.7% and Malta with 91.5%.

At the other end of the ranking, Bulgaria and Romania were the only member states where fewer than 60% of young people had achieved at least basic digital skills, at 52.8% and 53.3%, respectively.

Women Outperform Men Across Most Of The Bloc

Eurostat’s figures also highlight a persistent gender gap across much of the EU. At the bloc level, 75.9% of women aged 16 to 24 possessed at least basic digital skills, compared with 73.3% of men. The same pattern was recorded in 22 member states, including Cyprus.

No country recorded a wider gender gap than Cyprus. Some 73.9% of young women had at least basic digital skills, compared with 55.1% of young men, a difference of 18.8 percentage points.

A Wide Gap With Policy Implications

The disparity is significant because digital skills have become increasingly important for access to education, employment opportunities and participation in a technology-driven economy.

For policymakers, the figures underline two challenges: raising overall digital proficiency while narrowing the gap between young women and young men. Slovenia recorded the second-largest gap in favour of women, at 11.6 percentage points, followed by Austria with 9.1 points.

By contrast, young men outperformed women in only five EU countries. The widest gaps in favour of men were recorded in Malta, where 93.6% of young men had at least basic digital skills compared with 89.1% of young women, and Romania, where the figures stood at 55.1% and 51.1%, respectively.