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Labour Minister Pushes for Crackdown on Undeclared Work in Cyprus

The Labour Minister of Cyprus has announced a concerted effort to tackle the widespread issue of undeclared work, which has long been a challenge for the Cypriot economy. To formalise the labour market and safeguard workers’ rights, the Ministry is pushing forward new measures aimed at cracking down on employers who engage in illegal employment practices, including failure to declare workers, pay fair wages, or contribute to social security.

The campaign, which is part of a broader government initiative to enhance labour rights and ensure compliance with employment laws, seeks to address both the economic and social impact of undeclared work. With undeclared employment affecting a significant portion of the workforce, particularly in sectors such as construction, hospitality, and domestic services, the Labour Ministry has made it a top priority to enforce stricter regulations and penalties.

Undeclared Work: A Persistent Challenge

Undeclared work, often referred to as the “shadow economy,” is a global issue that has long plagued Cyprus. It encompasses a range of illegal employment practices, including the hiring of workers without contracts, underpayment of wages, and failure to contribute to social insurance schemes. For years, such practices have not only deprived workers of their legal rights and protections but also cost the government millions in unpaid taxes and social security contributions.

In Cyprus, the problem has been particularly pronounced in sectors that rely heavily on seasonal or informal labour. Construction, tourism, agriculture, and domestic services have been identified as industries where undeclared work is more common, with many workers vulnerable to exploitation due to lack of proper oversight or enforcement.

According to government estimates, undeclared work in Cyprus accounts for a considerable portion of the labour market. This not only weakens workers’ protection but also creates unfair competition between businesses that follow the rules and those that cut costs by circumventing legal employment obligations.

Stricter Enforcement and Penalties

To address these challenges, the Labour Ministry is introducing stricter enforcement mechanisms, including more frequent inspections of workplaces, harsher penalties for employers found violating the law, and enhanced cooperation between government agencies responsible for labour and tax compliance. Employers who are caught engaging in undeclared work may face heavy fines, legal action, and, in some cases, closure of their businesses.

The Ministry also aims to strengthen workers’ awareness of their rights through information campaigns. By educating workers about their entitlements, including the right to minimum wage, insurance, and other legal protections, the government hopes to reduce the number of people falling victim to exploitative practices.

Moreover, the use of digital tools to track employment data and improve transparency within the labour market is also part of the government’s long-term plan to combat undeclared work. These technological measures are expected to make it easier for authorities to detect and address violations more efficiently.

AI’s Economic Benefits Surpass Emissions Concerns According to IMF

The International Monetary Fund (IMF) has recently highlighted the potential economic benefits of artificial intelligence (AI), projecting a global output boost of approximately 0.5% per year from 2025 to 2030. This growth is expected to surpass the environmental costs associated with higher carbon emissions from AI-driven data centers.

The report, showcased at the IMF’s spring meeting, emphasizes the need for equitable distribution of these economic gains while managing the adverse effects on our climate. The forecast indicates that AI’s contribution to GDP growth will outweigh the financial impacts of emissions, though it points out the necessity for policymakers and businesses to mitigate societal costs.

Energy Demands and Environmental Footprint

AI is set to escalate global electricity demand, potentially reaching 1,500 terawatt-hours (TWh) by 2030, mirroring the energy consumption of countries like India today.

The increasing demand for data processing capacity could result in higher greenhouse gas emissions, but the AI industry aims to offset these with advancements in renewable energy technologies.

AI: A Driver for Energy Efficiency?

Analysts suggest that AI could potentially reduce carbon emissions through improved energy efficiency, fostering advancements in low-carbon technologies across sectors such as power, food, and transport. Grantham Research Institute stresses the significance of strategic action from governments and industries to facilitate this transition.

The role of AI in the global economy continues to evolve, stirring debates not only about its economic potential but also its environmental impact.

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