Hiring Guide: Key Intel to know before Hiring Malta Employees

Malta is an island in Europe that attracts tourists from around the world. With awesome beaches, harbors, and an appealing gambling industry, the economy of Malta is attractive even for investors. Despite being an island nation, Malta is a highly industrialized economy. Thanks to several agreements and trade relations with countries abroad, Malta has seen steady economic growth. It has a GDP of US$17.36 billion and attracted an FDI of around US$ 4,367,569.13 in 2021.

For recruitment and selection in Malta, you must follow the norms of the Labor Code as the Constitution of 1974 lays down. Following these norms is vital when you learn how to hire employees in Malta. Further advantages of hiring in Malta or setting up a business here are the presence of a solid democratic government (that holds 18th global rank among the best democracies), a bilingual population, a growing IT industry, and so on.

The country ranks 88th on the list of Ease of Doing Business. The top sectors in Malta that contribute in maximum amount to the GDP are-

• Fishing
• Gambling
• IT

The corporate tax structure in Malta is also business-friendly, which enables suitable recruitment and selection in Malta among companies. When you initiate recruitment and selection in Malta, you must maintain the laws governing employment relationships here.

Things to Know Before Hiring in Malta

As you begin hiring employees and start with recruitment and selection in Malta, there are specific rules to abide by. Following this helps hire employees in Malta and ensure that you do not attract fines or penalties.

• EU-based hiring- If you want to hire staff in Malta,  from the country, or other EU regions, the employee can begin work even without a work visa for up to three months. After these three months, a work permit is mandatory.
• Non-EU hiring- When hiring staff for Maltese companies from non-EU countries, follow all Immigration Act norms and get a work visa first.
• To hire staff in Malta, employers must ensure no discriminatory practices or related questions during the interviewing phase.
• The governing legislations around recruitment and selection in Malta are-

1. 1. Wage Regulation Orders
   2. Employment and Industrial Relations Act or Labor Code
   3. Employment Commissions Law
   4. Employment and Training Services Law
   5. Public Services Management Code

Employment Contract

It is optional for any working relationship in Malta to have a written form. However, most employment relationships have a written contract that mentions all job details. The work contracts are in English or Maltese and follow the rules of the laws mentioned earlier and collective agreement norms. For all purposes of recruitment and selection in Malta, a contract is drawn for fixed or indefinite terms. It applies to full-time or part-time jobs, commission-based roles, internships, and apprenticeships. The headers mentioned on a contract related to recruitment and selection in Malta are-

• Employer details
• Employee role and profile
• Duties of employee
• Duration of the contract
• Probation 
• Collective bargaining norms
• Salary 
• Benefits
• Work hours 
• Overtime
• Annual leaves and other holidays
• Notice period details
• Termination and dismissal clause

Probation and Termination

As per the Labor Code in Malta, the employment tenure’s initial six months is the employees’ probation period. The employer might impose a lesser probation span and mention the same on the employment contract.

An employer can terminate the employee’s services by giving due notice if the service span has crossed one month’s duration.

Notice period

The notice period for terminating a job role in Malta varies as per service tenure, as listed below-

Employment laws

When dealing with recruitment and selection in Malta, one must comply with laws governing employer-employee relationships. The Labor Code in Malta stands for inclusiveness and non-discriminatory practices. Abstain from asking questions that might breach these norms during the hiring process.

Working hours and breaks

As you hire staff in Malta, keep track of the permissible working hours-

• The standard working hours for staff in Malta are 40 hours every week.
• Some agreements mandate a 48 hour work week.
• Employees can work overtime up to 48 hours weekly at a mutually set pay.
• The working hours and overtime spans can vary per the job sector involved.

Payroll

• Once you set up a company and hire employees in Malta, make a monthly salary payout.

Minimum wage

• The average wage to hire employees in Malta is 835 Euros per month.

Bonuses

• The Maltese government has mandated and indicated full-timers, part-timers, and pensioners.
• Part-time employees avail businesses on a pro-rata basis of their working hours.
• The bonuses in Malta are categorized under Statutory Bonus that gets paid in June and in December. Besides this, there is a Weekly Allowance, paid in March and September.
• The statutory bonus stands at €135.10 for full-timers.
• The weekly bonus stands at €121.16 for full-timers.

Holidays for employees 

Official public holidays in Malta are listed below-

Other Leaves

Vacation Leave

Employees are entitled to four weeks plus thirty-two hours, that is, 192 hours of annual vacation leave.

Maternity and Paternity Leave

1. Employees who are pregnant are entitled to 14 weeks of uninterrupted leave, followed by four additional weeks of leave.

2. Fathers can also take paid paternity leave of 10 days after the child’s birth.

Social security

1. Employees and employers must pay social contributions per variable rates that change yearly. 

2. The employee-employer shares for social security contributions are 10% each.

Taxation

1. Malta’s corporate tax rate is 35%.

2. The standard VAT rate is 18%, while some sectors have reduced VAT rates ranging between 0%, 5%, or 7%.

3. The income tax brackets follow a progressive structure and have separate slabs for married taxpayers, individual taxpayers, and parent taxpayers, as outlined below-

The Cost of Hiring an Employee in Malta

As far as the recruitment fees in Malta and costs for the recruitment process in Malta are concerned, here are the main expense heads-

• Advertisement cost
• Hiring and interviewing cost
• Visa cost
• Payroll 
• Taxes and social security contribution
• Salary and benefits payout
• Bonus payments
• Vacation and leave cost
• Contractual and legal work cost
• Onboarding and training cost
• Inventory costs

What Does a Company Need to Hire Employees in Malta?

Employers in Malta may employ permanent, part-time, or apprentice employees. To hire employees in Malta, companies must comply with governing laws. A contract in Malta lays down the vital aspects of a working relationship. All documentation needed for hiring at any organization in Malta are follows-

1. Work visa or permit
2. Certified copy of the passport of an employee
3. Age proof of employee
4. Employment contract
5. Notarized certificate of company incorporation
6. Tax registration
7. Business licenses as applicable

Various Options for Hiring Employees in Malta                                                         

For all processes of recruitment and selection in Malta, there are two basic structures to follow-

• EOR service: For all needs related to recruitment and selection in Malta, outsource the same to an EOR service provider. Such solutions providers have the right mechanisms and systems to handle hires and draft contracts in the country. This eases the management aspect and covers all legal norms to the core.
• Internal hiring: You can set up a traditional team for HR and hiring staff. This involves hiring the HR team first. This will need extensive paperwork. This team further engages in research related to the Maltese market for jobs. Finally, as per the applicable laws of the land, the team will engage in closing a hiring chapter on your behalf.

The Steps to Hiring in Malta

The recruitment and selection in Malta mostly follow a set structure that begins with finding a new hire and finally onboarding the resource onto the company payroll.

1. Source the right resources

• Begin a hiring process in Malta by posting about all open positions on job boards and social media sites.
• JobsinMalta and VacancyCenter are common sites to post on.
• Use references and networking to get access to prospective candidates.

2. Shortlist prospects for recruitment and selection in Malta

• Candidates apply online via resumes or CVs.
• Quickly shortlist those candidates that fit in well with the  job requirements.
• Arrange for an interview round and inform the candidates via email.

3. Interviewing for recruitment and selection in Malta

• Schedule the interview but ensure to avoid asking any discriminatory questions. 
• Discuss the expected work of the candidate and indulge in some discussion around the candidate’s expectations.

4. Offer letter and work contract

• Share an offer letter before drafting an employment contract per laws for recruitment and selection in Malta.
• Mention if you are keen on a background check for recruitment and selection in Malta too, so that you receive consent for the same.

5. Onboarding and training

• Once the contractual work is over, you may begin onboarding.
• Round up the recruitment and selection in Malta with the induction of new employees in the company.

Let Multiplier be Your EOR Platform in Malta

When you hire staff in Malta, keep all legal codes in mind. Missing out on any single regulation can put your company in trouble. This is why a new company with little local experience in hiring or recruitment and selection in Malta can choose to partner with a reputed PEO-EOR firm such as Multiplier.

All processes around recruitment and selection in Malta become smoother and help answer the question of how to hire employees in Malta. Multiplier is a SaaS-based Employer of Record solutions that allows you to focus on understanding the Maltese market as you set up a branch in the country!