Pay Transparency in Cyprus: What Employers Should Know About the New Draft Law

Cyprus is moving forward with the implementation of Directive (EU) 2023/970 on pay transparency and equal pay between men and women for equal work or work of equal value.

A draft Cyprus law has been prepared under the title “The Law on Strengthening the Application of the Principle of Equal Pay between Men and Women for Equal Work or Work of Equal Value through Pay Transparency and Enforcement Mechanisms, Law of 2026.”

Although the law is still in draft form, it gives a clear indication of the obligations employers should start preparing for.

Who Is Impacted?

The draft law is relevant to both public and private sector employers in Cyprus.

Its practical impact will differ depending on the size and structure of the employer:

• All employers will need to consider how they determine pay, communicate salary information and justify pay differences.

• Employers recruiting staff will need to review job advertisements, salary ranges and interview practices.

• Employers with structured teams or multiple roles will need to assess whether employees performing equal work or work of equal value are treated consistently.

• Employers with 100 or more employees will be directly impacted by gender pay gap reporting obligations.

• Employers with fewer than 100 employees may not be subject to mandatory reporting, but should still be prepared to respond to employee pay information requests and comply with the equal pay principles.

In practice, this is not only an issue for large organisations. Even smaller employers may need to review employment contracts, confidentiality clauses, recruitment practices and internal pay criteria.

What Is Changing?

The draft law introduces a more transparent framework around how pay is determined, communicated and justified.

Employers will need to ensure that their pay structures are based on objective and gender-neutral criteria, such as skills, effort, responsibility, working conditions and other relevant role-specific factors.

This means that salary decisions, bonuses, promotions and pay progression should be capable of being explained and supported by evidence.

Recruitment and Salary Ranges

One of the most practical changes concerns recruitment.

Job applicants will have the right to receive information on the initial salary or salary range for the position before the interview stage.

Importantly, where a salary range is provided, the draft Cyprus law provides that the difference between the lower and upper end of the range should not exceed 20%.

Employers will also be prohibited from asking candidates about their previous salary history.

This means that job advertisements, interview practices and offer approval processes should be reviewed.

Employee Right to Pay Information

Employees will have the right to request written information about:

• their individual pay level; and

• average pay levels, broken down by gender, for employees performing equal work or work of equal value.

Employers must provide this information within a reasonable period and, in any case, within two months from the request.

Employers must also inform employees annually about this right and how it can be exercised.

Gender Pay Gap Reporting

The draft law introduces gender pay gap reporting obligations based on employer size:

• employers with 250+ employees: first report by 7 June 2027 and annually thereafter;

• employers with 150–249 employees: first report by 7 June 2027 and every three years thereafter;

• employers with 100–149 employees: first report by 7 June 2031 and every three years thereafter;

• employers with fewer than 100 employees: voluntary reporting.

The reported information will include gender pay gaps, variable pay gaps, median pay gaps and the distribution of men and women across pay quartiles.

Joint Pay Assessment

Where reporting shows a pay gap of at least 5% in any category of employees, and the employer cannot justify it objectively or correct it within six months, a joint pay assessment may be required.

This is a key compliance risk. Employers should therefore be ready not only to calculate pay gaps, but also to explain and, where needed, correct them.

What Employers Should Do Now

Employers should start preparing by:

• reviewing salary structures and job categories;

• documenting objective pay and promotion criteria;

• reviewing job advertisements and salary range practices;

• removing salary history questions from recruitment;

• checking whether HR/payroll systems can produce the required data;

• reviewing confidentiality clauses and pay secrecy provisions;

• preparing an internal process for employee pay information requests; and

• ensuring GDPR-compliant handling of pay data.

Final Comment

Pay transparency is becoming a practical employment compliance obligation in Cyprus.

The key issue for employers will not only be whether pay differences exist, but whether they can be objectively justified, properly documented and explained.

Early preparation will help employers manage legal, operational and reputational risk under the forthcoming Cyprus framework.