Ergani, the government’s online system designed to combat illegal work, is failing to fulfil its intended purpose, according to the employers’ federation (OEV). The federation is calling on the government to withdraw the decree establishing the system until a more simplified and user-friendly version is developed in collaboration with OEV.

The decree, issued on December 19, 2024, obliges employers to register their employees with detailed information for each staff member. OEV argues that this requirement is an overwhelming and costly burden, creating confusion and financial strain for businesses.

Employers who fail to meet the end-of-February deadline will face penalties, a concern particularly pressing for large companies with many employees.

“Since the additional employment terms do not serve the initial purpose for which the decree was issued, we call on the government to withdraw it and engage in substantive consultation with OEV to create a simple, user-friendly and easily manageable system that requires only the absolutely necessary information,” OEV said.

OEV also pointed out that this comes at a time when the EU has warned against excessive bureaucracy and called for reducing administrative burdens on businesses.

“It is unthinkable that Cyprus is placing a larger burden on its own businesses with such a decree,” OEV pointed out.

The Cyprus Mail has received complaints about Ergani, which has proven problematic for both the government and potential employees. Employers required to input data often abandon the process due to system glitches, leaving many eligible workers without jobs.

A particularly troubling issue arises when legally registered third-country nationals change their status to another legally recognized category. Despite having all necessary documentation, these individuals are often incorrectly flagged by the system as ineligible for employment.

Employers accessing Ergani are instructed to notify the system of new hires, departures, and employment terms. They must also register themselves and their employees electronically with the Social Insurance Services.

For third-country workers, Ergani processes the submitted information and determines whether they are legally entitled to work. However, many legitimate applicants are erroneously rejected by the system.

On October 24, 2024, lawmakers passed legislation tightening the rules on illegal and undeclared work, increasing penalties on non-compliant employers.

The new regulations empower the labour minister to issue decrees requiring employers to declare essential employment terms.

Under these rules, the fine for undeclared workers has increased from €500 to €1,000 per worker. A second offence within two years results in a €2,000 fine, while a third offence carries a €3,000 fine.

The Cyprus Mail contacted the Social Insurance Services and learned that if a person from a third country changes status, the system may wrongly recognise them as illegal.

One case reached the Cyprus Mail, with the frustrated couple on the cusp of suing the government.