Hiring guide in Malta

What should I know about hiring in Malta?

There are a few specifics to keep in mind when making an employment-related decision in Malta. One significant distinction from the legal systems of other countries is the procedure itself. 

An at-will employment relationship does not exist. In other words, an employer can only terminate an employee for cause and must give the employee notice of the termination. Also, it’s helpful to be aware that many employee rights are guaranteed by Maltese law. 

These include taking time off with pay, working in a safe and healthy environment, and being compensated fairly for one’s efforts. 

Finally, familiarity with the Maltese social security system is essential. Pensions, disability payments, minimum wage and medical coverage, are part of what you get with this system.

Why is Malta a good choice for finding remote employees?

Malta is an excellent choice for finding remote employees for several reasons. For starters, Malta is a very small nation. As a result, it’s much simpler to identify qualified people who are open to working remotely.

Secondly, Malta has a very advanced educational system. In other words, you will have no trouble recruiting skilled workers. 

Last but not least, the Maltese people place a premium on the use of the English language. In fact, English is one of Malta’s official languages. This makes it easy to communicate with your remote employees.

How can Native Teams help you hire in Malta?

If you want to begin hiring remote workers from Malta, you will need either a Maltese business license or the services of a global recruitment solutions provider. Cooperating with Native Teams often proves fruitful in such circumstances. We can help you hire new employees, pay them, and comply with Maltese labour laws through our Employer of Record services!

 Hire your first Maltese employee with Native Teams.

Legal requirements for hiring in Malta

Hiring in Malta requires following a strict set of labour laws and regulations which are outlined in the section below.

Legal framework

Types of employment contracts

There are two types of employment contracts in Malta: indefinite and definite contracts. 

Indefinite contracts are the most common form of employment agreements, distinguished by their open-ended nature, meaning they do not have a specified termination date. Either party may terminate the contract, but this requires appropriate notice and, in certain cases, a valid reason, such as redundancy, poor performance, or resignation. The length of the notice period is determined by the duration of service and the conditions outlined in the contract.

Definite contracts are established for a specific duration, with clear start and end dates. They are typically utilised for project-based work or to cover temporary absences. The contract automatically ends once the specified period concludes unless both parties agree to extend it. If either party terminates the contract prematurely without just cause, they may be liable for damages, which can include the unpaid wages owed until the end date of the contract.

A fixed-term employment contract may be established for a defined period to create an employment relationship, with the termination needing to be predetermined for an objective reason—specifically, the need for temporary work. Objective reasons can include replacing an employee who is temporarily absent or performing tasks limited by a deadline or specific event.

With the exception of justified reasons, a fixed-term contract can be renewed successively up to a maximum period of 4 years, after which the employee is deemed to be under an indefinite contract. If an employee’s fixed-term contract expires and they continue to work without a new contract being issued by the employer within 12 days of the previous contract’s expiration, they will also be regarded as having an indefinite contract.

Content of an employment contract

The employment contract must contain information about both the employer and the employee, including their full names, personal identification numbers, and addresses. For the employer, it may also include details about the headquarters or main place of business.

Moreover, the contract should specify the primary location where the employee will perform their duties. If the job involves working at multiple locations or lacks a permanent workplace, the contract must outline the various potential work sites to ensure the employee is informed about where they might be assigned.

The job title and description must be clearly defined in the contract, including a brief overview of the nature of the work and the responsibilities associated with the position. Plus, the contract should indicate the date it is signed and the expected employment commencement date. This establishes a clear timeline for when the employment relationship begins.

It is also essential for the contract to specify whether it is an indefinite (permanent) or definite (fixed-term) agreement. For fixed-term contracts, the end date or duration of employment should be mentioned, clarifying the terms regarding renewal or termination.

The number of days of paid annual leave that the employee is entitled to must be detailed in the contract, ensuring the employee knows their leave entitlements for planning purposes.

The gross salary must be outlined in the contract, including the basic salary, any allowances, and additional payments for work performed. Furthermore, it should specify the payment periods for these amounts and any other entitlements tied to the employment.

The working hours should be explicitly stated, detailing the length of the workday or workweek in hours. This establishes expectations for the schedule and addresses any overtime considerations. The contract must clarify whether the position is full-time or part-time, as this distinction is crucial for understanding the employee’s commitment level and the associated entitlements.

Finally, if the employment includes a trial period, the contract should define the duration and conditions of this initial phase. This ensures that both parties are aware of the expectations and terms during the trial period.

 Download a free employment contract for Malta through Native Teams.

Oral, written or electronic employment contracts

According to Maltese law, there is no specific requirement for an employment contract to be documented in writing. Therefore, an employment agreement does not have to be in written form; however, relevant laws and regulations would still apply in such situations. 

Despite this, it is common practice for parties to choose a written agreement, as it helps both the employer and employee clearly understand their respective rights and responsibilities stemming from the employment relationship.

Plus, Maltese legislation states that if the employment duration exceeds 1 month and the weekly working hours are more than 8, the employment contract must be in writing. It is important to understand that the lack of a written contract does not invalidate or negate the existence or enforceability of the employment agreement between the parties.

Probationary period

Generally, the initial probation period lasts for 6 months, although both parties can agree to a shorter duration. However, for positions in technical, executive, administrative, or managerial capacities, where the employee’s salary is at least double the minimum wage set for that year, the default probationary period is 1 year, unless otherwise stated in the employment contract or a collective agreement.

During this probationary period, either the employer or the employee can terminate the employment without needing to provide a reason, allowing for a degree of flexibility in this introductory phase. It is crucial to note that the probationary period must not exceed the legal maximum. If both parties agree to a shorter probationary period, this agreement is legally binding, and any extension can only occur up to the statutory maximum with mutual consent.

Working hours

For a full-time employee, the typical workweek should not exceed 40 hours, as specified by the relevant Wage Regulation Orders for each industrial sector. On the other hand, part-time working hours are classified as any hours worked that are fewer than those of a full-time employee.

Employees are prohibited from working for more than 1 employer for a total of over 30 hours per week unless they are engaged in additional employment activities. When entering into a part-time employment agreement, the employee must notify the employer about any existing part-time contracts with other employers.

Night work

Night work is defined as any work schedule that comprises more than 50% of the annual working hours between 22:00 and 06:00, or a smaller percentage as determined by a relevant collective agreement.

Alternatively, night work applies to any schedule in which at least three hours of the daily working time consistently occur between 22:00 and 06:00.

For employees designated as night workers, the average working hours must not exceed eight hours within any 24-hour period. This average is calculated over a reference period of 17 weeks unless a different reference period is outlined in an applicable collective agreement.

Breaks and types of leaves

An employee who works at least 6 hours in a day is entitled to a minimum break of 15 minutes during that workday unless a specific law states otherwise. Each worker is entitled to a daily rest period of at least 11 consecutive hours within every 24-hour period.

In addition to the 11-hour daily rest, every employee has the right to an uninterrupted weekly rest period, which can be one of the following options: 24 consecutive hours within a 7-day period, one 48-hour uninterrupted period within a 14-day period, or two separate periods of 24 consecutive hours each within a 14-day period.

Annual leave

Employees working a standard 40-hour week are entitled to a minimum of 4 weeks and 32 hours (192 hours) of annual leave each calendar year.

Annual leave begins to accumulate from the start of employment. Employees who work for less than a full calendar year are entitled to a proportionate amount of annual leave based on the duration of their employment within that year.

Annual leave can be taken in separate segments with mutual agreement between the employee and the employer. If no such agreement is reached, the leave must be taken continuously.

Public holidays

In Malta, public holidays encompass a combination of religious, historical, and national celebrations. For 2024, the public holidays in Malta include New Year’s Day on January 1, the Feast of St. Paul’s Shipwreck on February 10, St. Joseph’s Day on March 19, and Freedom Day on March 31. Good Friday varies each year and will be observed on March 29, followed by Workers’ Day on May 1, Sette Giugno on June 7, and the Feast of Saints Peter and Paul (L-Imnarja) on June 29. 

The Feast of the Assumption (Santa Marija) is celebrated on August 15, and Victory Day (Jum il-Vittorja) occurs on September 8, with Independence Day on September 21. The Feast of the Immaculate Conception is observed on December 8, Republic Day on December 13, and Christmas Day on December 25.

Salary

Since January 2024, the minimum wage per week is set at €213.54. As a result of this change, individuals earning between €192.73 and €198.73 per week will see an increase of €2 to €8 in their weekly wages, in addition to the statutory cost-of-living adjustment (COLA) for 2024.

To calculate the salary and taxes in Malta, click here.

Sick leave

The length of sick leave can vary significantly across different industry sectors. In sectors not covered by a Wage Regulation Order (WRO), employees are entitled to 2 weeks of sick leave per year, calculated in hours.

To be eligible for sick leave benefits, the insured person must have contributed to social security for at least 50 weeks, with a minimum of 20 weeks of contributions paid or credited within the 2 years leading up to the benefits claim.

Salary compensation during sick leave is calculated based on the compensation base, which is the average salary received by the insured individual over the 6 months prior to the start of the sick leave. This average salary determines the entitlement to salary compensation, irrespective of who bears the cost.

Parental leave

Under Maltese law, both male and female employees who have completed at least 12 months of continuous service with their current employer are eligible for unpaid parental leave.

This leave can be taken for reasons related to the birth, adoption, fostering, or legal custody of a child, allowing the parent to care for the child. Employees are entitled to 4 months of leave, which can be taken at any time until the child turns 8 years old.

If an employee changes jobs, any unused parental leave is transferred to the new employer. It is essential to understand that the employee does not qualify for a new parental leave period upon starting new employment; rather, they carry over any remaining leave from their previous job.

Paternity and maternity leave

According to Maltese law, private sector employees are entitled to a maximum of 2 days of paid paternity leave, although this may vary by sector. In contrast, public service employees are entitled to 5 days of paid paternity leave. 

For employees covered by a Wage Regulation Order, there is a provision for paid birth leave. This allows workers to take leave with full pay when their wife gives birth, ensuring they do not suffer any loss of income. This financial support enables employees to take the necessary time off to support their families during this significant life event without facing financial difficulties.

Methods of employment termination

Termination of an employment contract can occur through various means. First, the contract automatically ends upon the employee’s death, as it is fundamentally based on the personal service of that individual. Similarly, if the employer is an individual and passes away, the contract is terminated unless there is a legal successor or the contract is non-transferable.

Another common scenario involves fixed-term employment contracts, which naturally expire at the end of the specified period. It’s important to understand that these contracts are binding for their designated duration and should not be terminated prematurely. If the employer decides to terminate a fixed-term contract before its expiration, they are required to compensate the employee with half of the wages they would have earned during the remaining contract period.

Mutual agreement is another method for terminating an employment contract. Both the employer and employee can agree to end the contract at any time, provided that this decision is documented in writing to avoid potential disputes. In addition, an employer may choose to terminate the contract through dismissal as long as they comply with legal requirements, which include providing a valid reason for the termination.

Lastly, judicial termination is a method by which a court can order the termination of an employment contract. This can occur in situations where legal disputes arise or when the continuation of the contract is deemed untenable under the law. Each of these methods reflects the various circumstances under which an employment contract may be terminated, highlighting the need for clarity and adherence to legal standards.

Notice period and challenging the dismissal

Ordinary dismissal occurs when either the employer or the employee proposes to terminate an employment contract indefinitely, and it requires a notice period based on the employee’s length of continuous service with the employer. If the employee has been with the same employer for more than 1 month but not exceeding 6 months, the notice period is 1 week. 

For those who have been employed for more than 6 months but not longer than 2 years, the notice period increases to 2 weeks. If the employee’s tenure is more than 2 years but less than 4 years, the notice period is 4 weeks. For employment durations exceeding 4 years but less than 7 years, the notice period is 8 weeks. Beyond 7 years of service, an additional week is added for each subsequent year or part of a year worked, up to a maximum of 12 weeks.

Extraordinary dismissal does not require a notice period. If the employment is terminated during the probationary period, a notice period of 1 week applies, but only if the employee has been employed for more than 1 month. Moreover, if the length of service is 1 month or less, the employment can be terminated without notice or the obligation to compensate for notice.

Rights and obligations of unemployed individuals

Financial compensation for unemployment can be obtained through 2 separate schemes, each with its own eligibility requirements based on contributions or household situations.

The contributory scheme necessitates that individuals have made at least 50 weeks of contributions, with a minimum of 20 contributions being either paid or credited within the 2 years prior to filing a claim. This requirement ensures that applicants have been actively engaged in the workforce and have met specific thresholds to qualify for benefits.

On the other hand, the non-contributory scheme provides a Special Unemployment Benefit for heads of households, contingent upon their passing the means test. This benefit acts as an alternative to the standard Unemployment Benefit, available to those who meet the established eligibility criteria.

Severance pay

In Malta, there is no legal requirement for severance pay, meaning that employees do not have a statutory right to such compensation. However, in specific situations, especially during collective redundancies, a collective agreement between employers and employee representatives may outline provisions for redundancy pay. This agreement plays a critical role in establishing the specific terms and conditions under which severance pay is granted.

Prohibition of competition

Employees are not allowed to engage in any business activities related to the employer’s operations without the employer’s consent, whether for personal benefit or on behalf of someone else. If an employee breaches this prohibition, the employer can seek compensation for any damages incurred or claim any profits generated from the competing activities.

The non-compete clause, a restrictive provision often found in employment contracts, is not explicitly defined in Maltese Labour Law but is instead governed by legal precedents.

Employers and employees can mutually agree that, for a designated period following the termination of the employment contract, the employee will refrain from working for a competitor or engaging in similar business activities, either independently or on behalf of a third party.

According to Maltese case law, a non-compete clause is enforceable if it meets several conditions: it must be in writing, clearly outline the terms regarding the subject matter, duration, and geographical area, provide compensation for the employee’s compliance, and be deemed reasonable and necessary to safeguard the employer’s interests.

Furthermore, the duration of the non-compete clause should not exceed what is deemed necessary, as excessive restrictions on economic activities are not permitted. Courts prioritise the principle of freedom from employment constraints and have determined that a two-year duration is reasonable.

Lastly, a contractual non-compete clause must be incorporated into the employment contract and documented in writing.

Remote working policy

Employers also have the option to transition a specific section, department, or function, either partially or entirely, to remote work. In such cases, employers are required to provide employees with a notice period of 10 working days. When a remote work offer is made, the employee has the right to either accept or decline the offer. 

If both parties agree to a remote work arrangement, either party may terminate the agreement. During the first 2 months of this arrangement, either the employee or the employer can do so by giving 3 days’ written notice. After the initial 2-month period, a 2-week written notice is required for termination, unless an alternative notice period has been agreed upon in the written remote work agreement.

Intellectual property rights

Within the employer-employee relationship, works produced by an employee during their employment are generally owned by the employer unless the employment contract specifies otherwise.

Trademarks are regulated by the Trademarks Act (Cap. 416 of the Laws of Malta), which protects distinctive signs that identify goods or services from specific sources. Trademark protection necessitates registration, initially lasting for 10 years and renewable indefinitely. Employers often register trademarks to safeguard their brand identity, and employees are expected to honour these rights in their professional activities.

Employee data privacy

Employers are required to establish a legitimate basis for processing personal data, which can include the necessity of fulfilling a contract, compliance with legal obligations, or pursuing legitimate interests. Special categories of sensitive data, such as health-related information, demand enhanced protection, often requiring explicit consent or other lawful grounds for processing.

Employers must also provide clear and transparent information to employees about how their personal data is processed, detailing the purposes for which the data is used, the recipients of the data, and the rights of data subjects.

These rights include access to personal data, correction of inaccuracies, the right to erasure (“right to be forgotten”) under certain conditions, and the ability to restrict data processing. Employers are responsible for implementing suitable technical and organisational measures to protect employee personal data from unauthorised access or disclosure.

Responsibilities within remote work arrangements

When an employee seeks to amend their employment contract to allow for remote work, the employer is required to respond to the request in a timely manner. The employer may only deny the request if there are legitimate reasons, which must be clearly conveyed to the employee in writing within 8 days of receiving the request.

Moreover, all employees are expected to attend and engage in necessary meetings, work-related events, seminars, conferences, training sessions, and any other activities that require their physical attendance, as instructed by management.

Health and safety at home

Employers are legally required to provide a workplace that protects the health and safety of their staff. To fulfil this obligation, they must regularly conduct risk assessments to identify potential hazards in the work environment. 

Under the Maltese Employment and Industrial Relations Act, employees have the fundamental right to a safe and healthy work environment, and employers are legally responsible for ensuring that working conditions do not endanger their employees’ health or safety.

Maltese law mandates that employers perform thorough risk assessments to identify and address potential hazards. This includes providing adequate training on safety protocols, supplying appropriate personal protective equipment (PPE), and ensuring the presence of safety measures like fire exits, emergency response plans, and first aid kits.

What are the advantages of hiring employees from Malta vs other countries?

Malta’s strategic geographical location in the Mediterranean makes it an ideal hub for companies seeking to establish a presence in Europe, North Africa, and the Middle East. This advantageous position allows for easier access to these regions, facilitating trade and communication. 

Moreover, Malta’s time zone aligns well with both European and North African markets, allowing for real-time collaboration and quicker response times.

Another key benefit of hiring from Malta is the favourable business environment and tax regime. The Maltese government offers various incentives and support for businesses, including tax reductions and grants for certain industries.

Why use Native Teams for hiring in Malta?

Native Teams lets you employ team members ‘like a local’ meaning you get all the benefits of a global team, wherever you are based. Here are the reasons why you should use Native Teams for hiring:

• No paperwork: We will handle all the necessary paperwork for you.
• Save on taxes: We help you handle your taxes.
• No company set up: You can expand your business using our company entitles.
• Online onboarding: We’re here to ensure your onboarding process is trouble-free.
• No accounting: We will handle all of your accounting needs, including invoicing, payroll, and more.
• Increase your profit: We assist you in growing your business and maximizing your profits.
• Compliance expertise: we can assist your company in navigating the regulatory environments and ensure you meet all relevant requirements.
• Local support: We can assist you in understanding and complying with the relevant local laws.