Hire in Malta

When gathering personal data for pre-employment screening, compliance with the General Data Protection Regulation (GDPR) becomes essential. A potential employer must establish a lawful basis or obtain consent from the candidate to process their personal information.

Engaging a third party for background checks is permissible, provided that the applicant is notified about this procedure.

The probationary period in Malta spans six months, with the possibility of extension to one year for managerial and executive roles. Nevertheless, the involved parties in the employment contract may mutually decide on a shorter duration.

Throughout the probationary period, either party holds the right to terminate the employment without specifying a reason. If the employee has completed more than one month in the probationary period, a one-week notice is required for termination.

Workers may be required to work on public holidays, and there is no centralized legislation restricting this practice. Instead, different state-level acts (e.g., the National and Festival Holidays Act) stipulate that employees who work on official holidays are entitled to receive wages at a premium rate of 200% of the normal hourly wage rate. Similarly, employees working on weekly rest days are entitled to premium pay at a rate of 200% of the normal wage rate.

If a worker is required to work on a public holiday, they may be provided with either twice the wages or a substitute holiday with pay. Likewise, a worker required to work on a rest day must be compensated at overtime rates, which is twice the rate of normal wages.

The standard working week in Malta consists of 40 hours, excluding overtime. The total working hours, including overtime, should not surpass 48 hours per week. A minimum daily rest period of 11 consecutive hours is mandated.

The maximum weekly working hours of 48 hours are averaged over a period of 17 weeks, with an exception for specific sectors like manufacturing, tourism, travel, and catering, where the calculation is extended to 52 weeks.

In Malta, it is permissible for employers and employees to mutually agree on a consolidated wage, encompassing all working hours, including overtime. This practice is often observed with senior or managerial-level employees.

Eligibility for annual leave varies by location, and workers may carry over their annual leave; however, the accumulation of earned leave is typically capped at a maximum of 45 days.

If an employment contract expires before a worker can take their annual leave, compensation for the leave is calculated proportionately based on the number of months worked and the number of working hours per week.

Any overtime worked beyond the standard 40-hour week in Malta is compensated at a rate of one and a half times the regular wage, calculated over a four-week period. Specifically, overtime performed on Sundays warrants payment at a rate of two times the normal wage.

It is important to note that if an employee is pregnant, has recently given birth, or has adopted a child, it is prohibited to require them to work overtime during this period.

Every employee is entitled to receive a statutory bonus and a weekly allowance, which are disbursed twice annually as follows:

• June 15 – 30: €135.10 (covering January to June)
• December 15 – 23: €135.10 (covering July to December)
• Last working day of March: €121.12 (covering October to March)
• Last working day of September: €121.12 (covering April to September)

These taxable bonuses are required to be paid along with the employee’s monthly or four-weekly wage. For part-time employees, the bonus is pro-rated based on the number of hours worked.

In addition to these, employees may also receive a guaranteed, discretionary, or a combination of both types of bonuses as part of their overall remuneration.

In the event that the parties involved in a fixed-term contract decide to terminate the agreement before the specified expiration date outlined in the employment contract, the party initiating termination is required to provide a penalty payment to the other party. This penalty is equivalent to half of the wages that the employee would have earned during the remaining period of employment.

Termination of indefinite-term contracts may occur either due to redundancy initiated by the employer or through the voluntary resignation of the employee. The party initiating the termination is required to provide notice to the other party, and a dismissal is permissible when there is a valid and justifiable cause.

The duration of the notice period is determined by the length of continuous employment with the employer:

• 1 week: for employment between 1-6 months
• 2 weeks: for employees with 6 months – 2 years of service4 weeks: for employment between 2-4 years
• 8 weeks: for employment between 4-7 years
• Up to a maximum of 12 weeks: for employment exceeding 7 years (an additional week for each year of service or part thereof)

Should an employee under an indefinite-term contract fail to provide the required notice, they become liable to compensate the employer with an amount equal to half the wages that would have been payable based on the stipulated notice period.

Paying severance beyond the wages covering the applicable notice period is not obligatory. Nevertheless, it is a customary practice for trade unions or individual employers to engage in negotiations or extend severance payments in certain instances. In some cases, a settlement agreement may be executed, delineating the terms and conditions of the severance payments.

In Malta, non-competition clauses within the employment period are considered customary and typically enforceable. However, post-employment restrictive covenants, like non-compete and non-solicitation clauses, lack specific regulation in Maltese law, and employers are not compelled to offer compensation for incorporating such restrictions in the employment arrangement. Nevertheless, providing compensation can enhance the likelihood of enforceability.

For these restrictive covenants to hold weight, they must be deemed reasonable and constrained in their scope, particularly concerning duration and geographical coverage.

A fixed-term contract in Malta is eligible for consecutive renewals, culminating in a maximum duration of four years. According to Maltese law, the phrase “continuously employed” encompasses fixed-term contracts that are renewed within six months of their expiration and are factored into the calculation of the four-year period. Subsequently, unless the employer has valid reasons to persist with a fixed-term contract, it will be automatically converted into an indefinite-term contract. If a fixed-term contract expires but the employee continues to provide services to the employer, the employment relationship will also be regarded as indefinite, unless a new contract is issued within 12 days of the previous contract’s expiration. Furthermore, the terms of employment in a fixed-term contract must not be less favorable than those of an indefinite contract.

For these restrictive covenants to hold weight, they must be deemed reasonable and constrained in their scope, particularly concerning duration and geographical coverage.

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

Employers are obligated to adhere to GDPR principles, ensuring that data processing complies with:

• Lawfulness, fairness, and transparency
• Purpose limitation
• Data minimization
• Accuracy
• Storage limitation
• Integrity and confidentiality
• Accountability

Compensation disbursements, as mandated by law, must be accompanied by payslips containing the following details:

• Employer’s and employee’s names
• Employer’s address
• Employee’s job title
• Comprehensive breakdown of total remuneration
• Payment period
• Hours worked, encompassing regular, overtime, off-day, and holiday hours
• Utilized annual leave hours and remaining balance
• Any received bonuses, allowances, or commissions
• Deductions, encompassing national insurance contributions and taxes.

Various categories of documents are subject to distinct legislation and regulations regarding retention. Personal information adheres to PSD regulations, while particulars of employment status, such as name, ID, and contact details, must be preserved for a period of 10 years.

For part-time employees, the entitlement to paid annual leave is proportional to their total hours of work. Similarly, employees who have not completed a full year of service will have their entitlement calculated on a proportional basis.