Hire in Malta

Where there are minimum conditions of employment established by law or regulation, only provisions that are more favorable to the employee are enforceable. If an employee signs a contract for less favourable conditions, it is not enforceable.

Basic terms such as the rates of pay, hours of work, place of work, overtime rates and leave entitlement must be included in the document. The contract must be issued to the employee within eight working days from the start of employment.

Once personal data for the pre-employment vetting of the applicant is collected, the General Data Protection Regulation (GDPR) comes into play. A prospective employer must prove a lawful basis or have consent from the candidate for processing personal data.

The employer is permitted to hire a third party to conduct background checks, as long as the applicant is informed of this practice.

The probation period in Malta is six months but it can be extended up to one year for management and executive positions. However, the parties to the employment contract can agree to a shorter term.

During probation, either party can terminate the employment relationship at will without providing any reason. For an employee who has been in employment probation for more than one month, one week’s notice must be given.

The average, normal working week (excluding overtime) is a 40-hour week. Working time should not exceed a maximum of 48 hours a week, including overtime hours. Workers should have a minimum daily rest period of 11 consecutive hours.

The maximum weekly working hours of 48 hours is calculated as an average working time for each seven-day period over an average of 17 weeks. There is an exception for the manufacturing, tourism, travel and catering sectors, where maximum weekly working hours is calculated over a period of 52 weeks.

It is acceptable in Malta to have the employer and employee agree to a consolidated wage, which covers all working hours including overtime. This practice is common with senior or management level employees.

Overtime in excess of a 40-hour week is paid at a rate of one and a half times the normal wage, averaged over a four-week period. Overtime worked on Sundays is paid at a rate of two times the normal wage.

If an employee is pregnant, has just given birth or has adopted a child, the employee should not be asked to work overtime.

All employees are entitled to a statutory bonus and a weekly allowance, each paid twice yearly as follows:

• Paid June 15 -30: €135.10 (covering the period January to June)
• Paid December 15-23: €135.10 (covering the period July to December)
• Paid on the last working day of March: €121.12 (covering the period October to March)
• Paid on the last working day of September: €121.12 (covering the period April to September)

These bonuses, which are taxable, must be paid along with the employee’s monthly or four-weekly wage.

Part-time employees are entitled to a pro-rated bonus according to the number of hours worked.

Employees may also receive as part of their remuneration a bonus that is guaranteed, discretionary or a combination of both.

If the parties to a fixed-term contract wishes to terminate the contract prior to the expiry date as stated on the employment contract, the terminating party must pay a penalty to the other party. This amount is equal to half the wages that the employee would have earned in the remaining period of employment.

Termination of indefinite-term contracts can happen due to redundancy by the employer or through resignation by the employee. The party initiating the termination must give notice to the other party. A dismissal is permitted if there is a good and sufficient cause.

The notice period is based on the duration of continuous employment with the employer:

• 1 week: for employment between 1-6 months
• 2 weeks: for employees between 6 months – 2 years
• 4 weeks: for employment between 2-4 years
• 8 weeks: for employment between 4-7 years
• Up to a maximum of 12 weeks – for employment above 7 years (an additional week must be added for every year of service or part thereof)

If an employee under an indefinite-term contract fails to give notice, he or she will be liable to pay the employer a sum equal to half the wages that would have been payable according to the notice period.

It is not mandatory to pay severance payments, other than the wages covering the relevant notice period. However, it is common practice for trade unions or individual employers to negotiate or offer severance payments in specific cases. A settlement agreement is sometimes signed, which outlines severance payments.

Non-competition clauses applicable during the employment period are understood to be standard and generally enforceable.

Post-employment restrictive covenants, such as non-compete and non-solicitation clauses, are not regulated by Maltese law and employers are not obliged to provide compensation in return for including restrictive covenants in the employment relationship. However, compensation will help increase the chance of enforceability.

For restrictive covenants to be enforceable, they must be reasonable and limited in scope, particularly with regards to the duration and the geographical coverage.

A fixed term contract can be renewed consecutively up to a maximum duration of 4 years. In Maltese law, the term “continuously employed” includes fixed-term contracts that are renewed within six months of their expiration and are included in the four-year period computation. Thereafter, the contract will be deemed to be for an indefinite term, unless the employer has justifiable reasons for continuing with a fixed term contract. If a fixed term contract has expired but the employee is still providing services to the employer, the employment relationship will also be considered to be under an indefinite contract, unless a new contract of service is issued within 12 days of expiry of the previous contract. The conditions of employment in a fixed term contract shall not be less favourable than that of an indefinite contract.

Data protection is principally regulated by the EU General Data Protection Regulation (GDPR) and the Data Protection Act, Chapter 586 of the Laws of Malta.

Employers must ensure they are processing data in accordance with GDPR, namely:

• lawfulness, fairness and transparency
• purpose limitation
• data minimization
• accuracy
• storage limitation
• integrity and confidentiality
• accountability

Wages should be paid at regular intervals not exceeding one month.

Salary payments must come with payslips, according to the law, and must include the below information:

• name of the employer and the employee
• address of the employer
• employee’s designation
• breakdown of total wages paid
• the period for which payment is made
• number of normal hours worked (including overtime, work done on off day and holiday work)
• number of hours of annual leave used and the remaining balance
• bonuses, allowances or commissions received
• deductions including national insurance contributions and tax

The retention of different categories of documents is governed by varying legislation and regulations. Personal information follows PSD regulations but details of employment status including name, ID and contact details must be retained for 10 years.

In 2023, an employee with a 40-hour workweek will be eligible for 208 hours of paid vacation leave, which includes 192 hours of basic leave plus 16 hours in place of the two Public Holidays that fall on weekends.

Part-time employees are entitled to paid annual leave, pro-rated according to their total hours of work. The entitlement is also calculated proportionally for employees who have not completed a full year of service.

Sick leave entitlement in Malta depends on the applicable wage regulation order, which is industry dependent. This is typically around two working weeks per year. A medical certificate must be submitted to the employer.

For the first three days of sick leave, salary must be paid in full by the employer. The remaining days are paid by the employer at the full salary, after the sickness benefit entitlement under the Social Security Act has been deducted.

Each employee is entitled to one working day of bereavement leave, without loss of wages, on the occasion of the death of the spouse, parent, son, daughter, brother or sister of the employee.

A pregnant employee may take maternity leave for an uninterrupted period of 18 weeks. The first 14 weeks are paid by the employer and the remaining four weeks are paid by the Social Security Department if the employee has contributed at least one year of Social Security National Insurance. Otherwise, the remaining four weeks are unpaid.

A pregnant employee is entitled to paid time off to attend antenatal examinations, if such examinations must take place during work hours.

A pregnant employee should notify the employer in writing of the intended start date of maternity leave. It is recommended to give at least four weeks’ notice to the employer.

If a female employee does not resume work or resigns without cause within six months from the date of resuming work, she will be liable to pay the employer the sum equivalent received during the maternity leave.

Paternity Leave

Fathers will receive ten days of fully paid leave upon the birth of their child.

Parental Leave

Both male and female workers have the individual right to be granted unpaid parental leave in case of birth, adoption, fostering or legal custody of a child, to enable them to take care of that child for a period of four months until the child has reached the age of eight years. Parents are entitled to two months paid parental leave whilst also benefitting from another two months of unpaid leave, transferable from one parent to another.

Employers shall pay a maximum of 8 weeks/2 months of parental leave to their employees. The applicable payment rate is the Married rate established for the Sickness Benefit. The remaining parental leave is unpaid. When the employee returns to work, employers can apply for a refund from the Department of Social Security. The following refund claims should be made for each employee and child:

• 50% or 4 weeks of the entitlement paid up to when the child is 4 years old;
• 25% or 2 weeks of the entitlement paid up to when the child is between 5 and 6 years old;
• 25% or 2 weeks of the entitlement paid up to when the child is between 7 and 8 years old.

Parents have the right to request for flexible working arrangements for the first eight years of the child’s life through flexible working schedules, remote work arrangements or reduced working hours.

Natural or adoptive working parent of a child are entitled to three months of parental leave without pay, as long as the child is not older than 8 years of age.

Marriage Leave

Each employee is entitled to two working days’ marriage leave, which is leave to be granted without loss of wages on the occasion of the marriage of the employee.

Urgent Leave

An employer is bound to grant to every employee, both full and part-time, a minimum of 15 hours with pay per year as time off from work for urgent family reasons as specified in the respective regulations. The total number of hours availed of by the employee for urgent family reasons will be deducted from the annual leave entitlement of the employee.

Carer’s Leave

Each employee is entitled to five days of unpaid carers’ leave per year to take care of an ill family member or anyone living within the same household.

Employees benefit from a total of 14 paid public and national holidays per year.