ECONOMY: Cyprus to abolish guarantees for foreign workers

Cyprus is pushing for the abolition of a mandatory cash guarantee for foreign workers paid by their employers who are usually on low incomes and in need of care.

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Interior Minister Constantinos Petrides said that a bill has been sent to the Legal Service providing for the complete abolition of bank guarantees that an employer of a third-country national was obliged to deposit.

The current law provides that if an employer wishes to hire a third-country national they have to deposit a guarantee of €850 with a Cyprus bank for the purpose of repatriating the employee, upon the completion of their work contract.

In the case the worker is from a European or a Middle East country, the guarantee amounts to €550. Many are employed as home helps.

Among those who were required to pay guarantees, Petrides said, were the elderly and the disabled who live on their pensions and find it very difficult to find money to cover such guarantees.

Petrides described it is an anachronistic and bad practice, which “holds thousands of vulnerable people hostage”.

He said it also took up a lot of time and official red tape to deal with such guarantees.

“For 2018 alone, the guarantees we liquidated from the banks are around €300,000. That is, in cases where employees have left and not been found. Of the €300,000, only €75,000 was used to repatriate workers,” said Petrides.

The Department of Migration has a reserve of €4 mln accumulated by guarantees deposited by employers.