Situated in the central Mediterranean Sea, Malta is a booming economy and a hotspot for businesses and entrepreneurs. This attractive destination is suitable for foreign investments as well. Besides, Malta has the lowest corporate tax rates in the European Union. All these reasons enhance the potency of doing business in Malta.
However, to hire a talented workforce and enhance business productivity, it is necessary to have a clear idea about the labor act rules in Malta. These rules will help you hire and manage the best talents while lawfully conducting your business in Malta. A foreign company can establish a subsidiary in Malta, provided they comply with the country’s labor rules and regulations.
Malta has various labor rules and regulations. To learn about them, go through this employment law in Malta guide.
Applicability of the Act
The Malta labor laws apply to all employees working in Malta. It includes people who work as employees in some Maltese companies as well. Further, the labor regulations in Malta apply to those non-resident employees whom the companies send for business purposes. In short, as long as employees of a business organization live and work in Malta, they are bound by the Malta labor law.
These are the people covered by the Malta labor law:
- Employees
- Employers’ interest group
- Trade unions
- Workers
Employment Contract
Employees working in business organizations in Malta receive a contract in written form. This written contract highlights all the fundamental working conditions of the employee. Some basic information added in this contract includes working hours, remuneration, overtime, leaves, holiday entitlement, and many more. The employer provides this contract to the employee within one month of joining.
However, the type of employment contracts in Malta differ and largely depend on the organization. The various types of employment contracts according to the labor code in Malta include:
Indefinite or open-ended employment contract
- The most common type of employment contract
- Has an indefinite contract
- Either party can terminate a contract
- Both employer and employees must abide by severance agreements, terms of the notice, and collective agreements
Fixed-term employment contract
- Employers can renew it for up to four years
- Shift to an indefinite contract after the tenure’s completion
- Contact the employer within 12 days for a contract extension
- Termination of the contract before the tenure will lead to paying half the wages to the employee
Probation period in the employment contract
- Termination of probation is possible with one week’s notice
- One year’s probation applied only to managerial and executive posts
Some other types of employment contracts functional in Malta include part-time permanent work, commission-based employment, and apprenticeships and traineeships.
Key Provisions of the Act
The labor regulations in Malta highlight the following key provisions for the benefit of the employees:
Wages
- The minimum weekly wage for an employee above 18 years is EUR 192.73.
- Full-time employees of 17 years get EUR 185.95.
- Employees below the age of 17 years get EUR 183.11.
- After completing one year in an organization or enterprise, employees are entitled to a hike of EUR 3 per week.
Bonus and weekly allowance
- Per the labor code in Malta, employees get a total statutory bonus at an interval of every six months.
- A bonus of EUR 135.10 will be paid twice a year – by the end of June and between the 15th to 23rd of December every year.
- Employees get a total statutory weekly allowance at an interval of every six months.
- This weekly allowance of EUR 121.16 is paid twice – at the end of March and September.
Overtime
- The Wage Regulation order regulates overtime rates for employees.
- Employers must mention the overtime rates in the employment contract. The applicable overtime rate is one and a half times the standard wage.
Payslip conferment
- Every employer must provide a payslip to the employees before or during paying wages.
- This payslip should contain the following details:
- Name of the employer and employee
- Address of employer
- Designation of employee
- Break down of wages along with the total amount paid
- Hours worked
- Overtime hours worked
- Leaves taken by the employee
- Bonus, allowance, or commission
- Deductions related to insurance, tax, or similar other features
Working hours
- The labor code in Malta enforces a working hour of 40 hours per week for a full-time employee.
- Working hours must be at most 48 hours a week.
- Employers asking employees to work more than 48 hours will be considered overtime.
- The night working hours must be at most 8 hours every 24 hours.
- The working time for the night shift starts at 22.00 hours and ends at 6.00 hours.
- Working hours in Malta labor law mentions a consecutive 11-hour rest for the employees daily.
Leave entitlement
- On the occasion of the death of a family member, all employees get paid bereavement leave.
- Employees get paid bereavement leave only on the death of the employee’s husband, wife, father, mother, brother, sister, daughter, and son.
- Employees get a fully paid injury leave of one year.
- Employees in Malta get two days of paid marriage leave as prescribed in the Minimum Special Leave Entitlement Regulations.
- Employees get two weeks of paid sick leave in Malta per year and Social Security benefits.
- Employees can get an urgent leave of fifteen hours if there is any family issue.
Maternity and Paternity leaves
- A pregnant employee gets maternity leave provided she has filled and submitted the maternity leave form in Malta.
- The leave rules of maternity are the same for maternity leave in Malta for foreigners.
- Every pregnant employee gets an uninterrupted maternity leave for 18 weeks. Out of this, the first 14 weeks are payable by the employer.
- For shared paternity leave in Malta, employees get ten working days right after the birth or adoption of a child.
- Work-Life Balance for Parents and Carers Regulations regulate Malta paid maternity leave.
Rights on termination
- For Malta employment law termination, the employer must provide a termination certificate to the employee stating the employment duration, services performed, nature of work, and wages.
- Termination during probation does not require the employer to mention the causes of termination.
Notice period
- According to employment law in Malta, termination during probation requires one week of notice.
- The length of service of the employee determines the calculation of the notice period as follows:
Employment tenure | Notice period |
More than one month, less than six month | One week |
More than six month, less than two years | Two week |
More than two years, less than four years | Four week |
More than four years, less than seven weeks | Eight week |
For an employment exceeding seven years, an additional week is added. The mentioned addition caps at twelve weeks.
Penalties
The employer and the employee must adhere to the Malta Labor Law. Failing to do so can lead to legal punishment. Complaints can be made to the Department of Industrial and Employment Relations. For criminal action, the employee has the right to take civil action against the employer.
Failure to pay wages at the right time, breaching of rules made in the contract, unfair dismissal, and discriminatory treatment can all lead to civil cases. Breaching employment contracts can lead to a fine of up to EUR 2,329.37 and six months to two years of imprisonment or both.
Compliance Strategies for Employers
Companies should follow compliance strategies considering the Malta labor law to get the best talents for their enterprises. Here are some compliance strategies for effective and efficient hiring:
In-house HR team
Suitable for medium to large enterprises with a budget allotted for looking after the labor law.
Promotes reforms to reduce workplace discrimination
Proper moderation of various perks and benefits per the labor code in Malta
Dedicated third-party HR agencies
Employers can venture with knowledgeable third-party HR agencies to comply with Malta’s labor regulations.
These agencies work in a similar fashion as an in-house HR team.
Employer of record solutions
Suitable for companies and employers hiring international talents, irrespective of the business size.
Employers can impose some ground rules according to their needs.
It saves resources and time for the employers
Less time-consuming with outstanding results.
How Can Multiplier Help?
To start a business in Malta and hire the required talents, Multiplier can stand by your side. They are a comprehensive PEO-EOR platform that helps you follow the Malta labor law and hiring process accordingly. Our expert team helps businesses draft multilingual contracts, manage international payroll and conduct employee onboarding per the requirements. So, accelerate the growth of your business with the help of Multiplier and test more than 150 markets with minimum hiccups.