Employer of Record (EOR) in Malta - Employment Laws, Payroll, Hiring

Employer of Record in Malta

Employer of Record (EOR) solutions include a gamut of services for customers who are willing to recruit employees and thereby run the payroll, despite not having an office or subsidiary in the country. The recruitment process is carried out by the EOR service in the country as per the local laws. Employees work for the parent company as a team, but the EOR firm manages the day-to-day operations and human resource (HR) tasks, including recruitment, hiring, onboarding, payroll, taxes, probation, termination, leaves, compensation, and visas.

If you are planning to tap into expansion opportunities in Malta, connect with Skuad experts. Skuad’s high-tech, centralized HR platform can expedite your expansion plans. Talk to a Skuad expert today.

Malta at a Glance

Population: 0.5 million

Currency: Euro (EUR)

Capital: Valletta

Languages spoken: Maltese and English

Gross Domestic Product (GDP): USD 18.13 billion

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Employment in Malta

Malta Labor Laws

The Employment and Industrial Relations Act under the Laws of Malta Chapter 452 and a series of 118 subsidiary regulations govern employment in Malta. These laws cover work conditions, rights, minimum wages, clauses of termination, and more. Several EU directives and regulations such as those on the posting of workers, transfer of business, and collective redundancies form subsidiary laws in Malta. Maltese Laws regulate health, and safety along with disability, equivalent treatment, and data protection.

Compensation Law	Overtime	Average weekly working hours inclusive of overtime cannot exceed 48 hours over the reference of period of 17 weeks. An exception is in the case of sectors of tourism and manufacturing, where the work requires travel and catering. Here, the reference period is 52 weeks.
	Night work	The working hours daily of a night worker are not required to go beyond an average of eight hours in 24 hours. The workers at night are required to get a minimum of 24 hours of weekly rest.
	Rest Days	The law guarantees 11 hours of daily rest and a minimum of 24 hours of weekly rest.
	Labor Codes	Following its inception in 1974, the Republican Constitution of Malta is the principal instrument that controls the Labor Law. It is split into the primary legislation, the secondary legislation, and the Public Service Management Code. Laws that govern employment relationships in Malta are, The Labor Code, which is also called Employment and Industrial Relations Law The Employment and Training Services Law and The Employment Commissions Law Particular employment conditions in some sectors are determined by The Wage Regulations Orders The Public Service Management Code contains terms about the service concerning public administration officers
Immigration Act	In Malta, the regulator for immigration is the central government, which relates to citizenship and immigration. This includes the regulation of citizenship and the (Individual Investor Program (IIP). Before the introduction of the IIP, applicants for citizenship were processed by a department within the Prime Minister’s Office. Foreign individuals recruited in Malta Foreign citizens from EU countries are allowed to come and live in Malta without applying for a residence permit for three months. During this time, they may also take employment with a Maltese company. After this period, they must apply for a work permit to be hired in Malta. Foreign citizens from non-EU countries may also come to Malta per the provisions of the Immigration Act. However, they will only be hired by a Maltese company after obtaining their work visas.

Other employee entitlements are given below.

Entitlement	Explanation
Working Hours	The Maltese employees in the private sector generally work 40 hours per week. Offices are open from Monday to Friday, generally from 8 am to 5 pm.
Employment Contracts	Contracts of employment in Malta are required to add the statutory conditions that are regulated by law. The contract types are fixed-term as well as indefinite. In Malta, trade unions are common, but the fees related to membership are comparatively high-priced. Employees and employment contracts in Malta are, Employees who are hired by companies Workers who work in agencies Staff whose employment is on contract Staff who are self-employed, dependent on a particular employer The agreement is normally written, and it is given to the worker eight days from the beginning of the employment.
Public Holidays	New Year's Day (January 1) Good Friday (April 2) Saint Joseph’s Day (March 19) Victory Day (September 8) Assumption of Mary (August 15) Christmas Day (December 25) Feast of Saint Paul’s Shipwreck (February 10) Freedom Day (March 31) Republic Day (December 13) Feast of the Immaculate Conception Feast of Saints Peter and Paul (December 8) Sette Giugno (June 7) International Workers’ Day (May 1)
Remuneration	A working person in Malta earns about EUR 4,620 in a month. The salaries are from EUR 1,170 on the lowest average to approximately EUR 20,600 up to the highest average. This average salary of the month is inclusive of transport, housing as well as other benefits. There is a variation in salary across different careers.
Minimum Wages	The minimum wage of Malta is set as, Over EUR 181.08 per week, for 18 years EUR 174.30 per week, for 17 years EUR 171.46 per week, for under 17 years It is noteworthy that the national minimum wage for part-time employees is proportionally calculated and is the same as the hourly rate of full-time employees as per the minimum wage of the relevant Wage Regulation Order. In cases where a Wage Regulation Order is not suitable, at an hourly rate of at least the minimum wage as per national pattern suitable distributed by forty. Monthly wages are calculated at 4.33 times the defined weekly wage. It is estimated 4.33 times the conventional hours weekly if the hourly wage is provided.
Vacation	The government’s Department for Industrial and Employment Relations (DIER) website shows that vacation leave for 2021 will remain the same as 2020: 27 days.
Sick Leave	Sick leave is the leave provided to an employee who provides a medical certificate verifying the inability to work. Its payment is the amount equal to the sum set for sickness benefit entitlement at the rate established under the Social Security Act. Part-time employees get paid sick leave calculated on a pro-rata basis. Further, this entitlement is calculated proportionally for those who have not completed a complete year of service.
Maternity Leave	Female workers can avail of the right to maternity leave, as declared under the Regulations of Maternity Leave, for 18 weeks or 126 consecutive days. Out of these, 42 days of leave are a compulsory right and availed post-birth. A leave of four weeks may be availed before birth, and the remaining eight weeks are taken immediately before or post-birth at the request of the employee. If unable to take a four-week pre-natal leave before birth, it can be taken after childbirth. The female employee is required to inform the employer of the intention to take maternity leave a minimum of four weeks before the beginning of maternity leave.
Paternity Leave	The father of the child is entitled to a fully paid leave of one day on childbirth.
Adoption Leave	In the case of the adoption of a child, the laws provide for a leave for the first 14 weeks of adoption, whereby the employee is entitled to full wages.
Parental Leave	Parental leave to care for a child includes both male and female employees for their child’s birth, adoption, and taking up any legal custody. These leaves can be availed of to take care of the child until they attain the age of eight years. It is for four months and is non-transferable.
Bereavement Leave	Bereavement leave includes leaves granted to the employee with wages on grounds of death of parents, spouse, child, brother, sister, or anyone in the legal custody of an employee.

Avail yourself of Skuad’s EOR solution for Malta by talking to Skuad experts today. We ensure to expedite your expansion efforts while adhering to the employment laws perfectly.

Contractors vs. Full-time Employees

Although an employment contract does not have to be in writing, the below-mentioned points are important.

When a period of employment is more than one month and exceeds eight hours of work in a week, the employer is required to provide a written statement to the employee giving the conditions of work within the eight working hours in a day, starting from the initiation of job or employment
A written employment contract and job description are considered good practices
Employment contracts can be definite or indefinite
A definite contract means a fixed-term contract wherein both parties normally accept its duration. It also includes a date of expiry
An indefinite contract is one wherein the employee is engaged in employment for an indefinite period (without a limit)

Malta employment invariably includes an employment contract on how the employee consents to complete detailed work for an employer for agreed salaries. A written statement with the agreed conditions of employment is provided to the employee within eight days following the appointment. Employment includes a fixed term or an indefinite and maybe a full-time or part-time one. The salary frequency payments vary with the job nature. Salaries are directly credited to the bank account of the employees.

If employment is terminated based on redundancy, the employee will be reemployed if the position is available within one year from the termination date. Employment that is temporary and fixed-term expires at the end of the specified period, and no notice is required. A fixed-term contract shall be taken as an indefinite period contract if the employee is retained after the contract expires if the latter is not provided with a new contract in the first 12 working days after the expiry of the former contract.

Skuad’s high-tech, centralized HR platform can help you hire employees for expansion in Malta whether you require full-time or contract-based workers. Talk to a Skuad’s expert and book a demo today.

Hiring in Malta

The primary step in the hiring process is posting a job advertisement. The employers must provide detailed information regarding the job role, and duties of the role.

The following portals can help find jobs.

Times of Malta
MaltaJobs
CareerJet
JobsInMalta
LinkedIn
MaltaJobPort
Maltapark
KeepMePosted

Hiring Process in Malta

For new employees in the labor market, the documents required are as follows.

Employee’s identification card card
The NI 3, obtained from the district office of the Department of Social Security
The employment license for nationals of third-country and the EU going through a phase of transition
A certificate from the Department of Citizenship and Expatriates, Evans Building, St. Elmo Place, Valletta for those born aboard but with dual citizenship

There is restricted employment of minors of compulsory school age.
Employers must legally notify the career portals of details of new employees.
The corporation must also be informed of terminations.
For Maltese nationals, if the employers are advertising on job sites, the details of competencies, qualifications, skills, and work experience requirements must be given.
For employing EU nationals, the vacancies can be advertised on job portals and through job fairs and recruitment events conducted for 31 European-wide network countries (EURES).
For employing third-world countries’ nationals, a single permit directive is to be followed.

Advantages and Pitfalls of Online Hiring

The advantages of online hiring are as follows.

It is cost effective
It is quickly available
It can stretch out to a large market
It is easy and simple
It can allow the creation of powerful job advertisements
It is flexible and allows confidentiality

The disadvantages of online hiring are as follows.

The effectiveness of the candidate cannot be measured immediately
It is an informal process
It may not attract the right candidates
Technical issues can hinder the process

Avail of Skuad experts’ guidance and services that can help you with effective hiring in Malta.

Probation & Termination

Probation Period

Probation is the first six months of employment. The parties may consent to a lesser term. For a contract of service or a collective agreement concerning employees with executive, technical, managerial position, or administrative jobs, or when the wages are at least twice the minimum wages for the year, the probation period is one year, unless a shorter duration is agreed upon.

The probationary period is not to be increased beyond the maximum period approved by law. Where the employer and the employee allow for a lesser period, such a period is compelling by law and may be increased up to the highest limit considered by law if both parties agree.

Termination of Service

When on probation, each party can terminate the employment without specifying any cause, given that one week's notice is provided if the employment has surpassed one month. But in the matter of terminating the employment of a pregnant employee while on probation, the employer is required to give her the grounds in writing to verify that the removal is independent of the employee’s health.

The Employer may only terminate a contract of employment based on a right and satisfactory cause. A term that has no legal explanation and comprises the interpretational reason for each case of wrongful removal is not valid.

Skuad experts can help you with effective HR solutions. Talk to experts today to learn more.

EOR Solution

An EOR service helps organizations manage payroll in the country. Additionally, it helps in solutions through taxation and compliance management matters, and the burden is eased for employers. EOR providers take care of employment contracts, compliances and local norms, compensation and benefits, employee expenses, and probation, separation, and termination.

The greatest benefit of working with an EOR service is that you can focus on growing your company while your EOR partner takes care of the rest. Skuad can make sure each of your employees has a positive hiring experience. Since we take over all the HR-related processes, including hiring, payroll, taxation, and securing visas and work permits for your employees, you’ll be able to focus on the business side of things. Further, you won’t have to worry about contravening any of the Malta employment laws.

Skuad’s Malta EOR solution can take care of work visas and other HR-related tasks for you. Talk to us to learn more.

Types of Visas

Category	Explanation
Schengen Visa	This is for a short stay, issued for 90 days.
National Visa	This is a long-stay visa or a D-Visa, which is issued for up to 90 days, but not more than 365 days.

Requirements to Obtain a Work Visa in Malta

The requirements of a Maltese visa are,

A completed visa application form
Covering letter justifying applicant’s trip to Malta
At least two blank pages in a valid passport
Two passport-size photos
Proof that the applicant has travel medical insurance covering the entire Schengen area
A company based in Malta provides an employment contract
Proof of accommodations for the stay in Malta
Proof of satisfactory financial means to cover the complete period of stay of the applicant

Get the right guidance from Skuad for your employees’ visa requirements. Talk to Skuad to learn more.

Work Permits in Malta

For Malta’s accession to the EU, citizens of EU/EFTA countries and their close family members including spouses and children will not require any employment licenses for working in Malta, even if they are not EU or EFTA citizens. All other nationals, termed Third Country Nationals (TCNs), are to provide a single permit application for working and residing in Malta.

Single Permit Procedure

From 2014, every TCN is required to complete the process of a single permit. This is to be approved for work and residing in Malta. This single permit system requires the application of a Single Permit, which must include the following.

A valid employment contract copy
Cover from private medical insurance for 12 months
Position description signed by the employer
A signed CV
References for work experience of a minimum of three years are to be submitted to Identity Malta

Skuad’s extensive EOR services include sponsoring work permits. We have comprehensive knowledge of the local laws about work permits. Immigration laws are revised regularly, so it’s hard to keep up with the latest developments. We have expertise in Malta’s taxation and immigration policies that can ensure you receive up-to-date, accurate information. Talk to us today to learn more.

Payroll & Taxes in Malta

Taxes in Malta

In Malta, the taxes are as follows

Tax	Explanation
Value-added tax	18%
Personal income tax	0% to 35%
Corporate income tax	35%
Social Security Contributions (both for employed and self-employed)	10% to 15%

‍Payroll Options in Malta

The four main choices include the following:

Remote	For payroll in another country, you can add employees in Malta to make a centralized payroll.
Internal	You can create an internal payroll for large companies with a well-staffed HR department.
Outsourced to a local company	The outsourced body shall be responsible for generating and executing payroll.
Outsourced to a global company	For better management of payroll, outsource it through global EOR services such as Skuad.

Skuad will outsource your payroll and also shoulder all compliance. We’re here to make your expansion easier so that you can focus more on your strategy. Talk to us today to learn more.

Incorporation of a Subsidiary in Malta

For incorporating a subsidiary in Malta in 2021, the investor must observe the provisions of the Maltese Companies Act. These include,

Name and registered address of the office
Details of the nature of the company
Details of the company’s activities
Shareholders’ details
Amount of capital details
Shareholders’ rights and the number of shares issued to all shareholders
Company directors and secretary details
Availability period
The company’s legal representative details

Talk to us to know how Skuad will let you start working in the country faster without the need to first set up your subsidiary. You won’t have to learn Malta’s subsidiary laws, and you can run your company without worrying about the risk of compliance. We’ll give you all the tools you need to succeed.

Skuad’s EOR services handle all compliance functions including payroll and taxation. Get in touch with Skuad experts to learn more!

Professional Employer Organization (PEO)

A professional employer organization (PEO) collaborates with medium- and small-sized organizations to provide HR services. A PEO handles various HR services such as recruitment, payroll, training, and other HR tasks. An EOR also provides similar HR services; however, the difference lies in the arrangement or association between the outsourcing company and the business.

A PEO acts as your co-employer, whereas an EOR service acts as the legal employer of your employees. The latter assumes all the responsibilities and liabilities of your remote team. You can outsource a specific HR function or end-to-end activities.

Further, an EOR service allows you to expand your workforce without setting up a business entity. It handles payroll funding, worker’s compensation, and unemployment claims and reports. It files taxes under its file ID number. A PEO service cannot provide these services without an existing subsidiary setup.

Skuad provides top-notch services. Its unified employment platform handles all HR-related services with efficiency and dedication. We strive to understand your needs and end goal to help grow and expand your business. Our bespoke services will save you precious time and money. Book a demo with Skuad experts to know more about our EOR solution.

Conclusion: What Gives Skuad’s Malta Solutions an Edge?

Skuad has an extensive network in 150+ countries across the globe and provides a single interface to onboard and manage employees and contractors. It offers consistent prices irrespective of the location and manages the payment of your team through a single invoice.

Skuad offers customized EOR solutions to kick-start your business in Malta. Its extensive knowledge of the local laws, language, customs, and markets will ensure the smooth expansion of your business. It also ensures that your IP, invention rights, and sensitive employee details are fully protected wherever you operate. For more details, contact Skuad experts!’

FAQs

1) What is an employer of record in Malta?

An Employer of Record (EOR) in Malta legally employs workers on behalf of a client. The EOR manages payroll processing, tax compliance, benefits administration, and adherence to Maltese labor laws. This lets companies hire employees in Malta without setting up a local legal entity.

2) How does an EOR work?

An Employer of Record (EOR) operates by legally hiring employees on behalf of a client company. The EOR handles all administrative and compliance tasks. The client company oversees the day-to-day activities and performance of the employees, while the EOR ensures all legal and regulatory requirements are met.

3) What is the average salary in Malta?

As of the latest data, the average monthly salary in Malta is approximately €1,800 to €2,000, which translates to around $2,100 to $2,300. Salaries in Malta change based on the industry & job role. To calculate the cost of employment in Malta, click here.

4) What are the working hours legislation in Malta?

The typical workweek is 40 hours over five days. Employees are entitled to a minimum daily rest period of 11 consecutive hours and a weekly rest period of 24 consecutive hours, typically on Sundays.

Malta

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Employer of Record in Malta