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Undoubtedly, payroll is a critical process for any organization. The pay cycle in Malta refers to the period an organization pays its employees, which can vary depending on the pay frequency the organization chooses to adopt.

Salaries are paid every 4 weeks on regular payment schedules.

There are no provisions in the law regarding 13th salaries.

Effective January 1, 2025, the weekly minimum wage in Malta will increase to €221.78 for employees aged 18 or older. This represents an increase from the current rate of €213.54.

The Wage Regulation Order (WRO), which sets varied overtime standards by industry, governs overtime. If an employee is not covered by the WRO, overtime is calculated at 150% of the regular pay rate for work performed more than 40 hours per week over four weeks.

However, this is averaged over four weeks or a shift cycle, so working less than 40 hours in one week might affect your entitlement to overtime the next week.

• Financial Documentation - The retention period will be for 10 years
• Collective Agreements - Physical and Electronic files will be retained for 8 years from the date the collective agreement expires
• Termination Cases - Physical and Electronic files will be retained for 5 years from the date the case is solved

Employers must abide by the provisions governing discrimination legislation and ensure that the selection and recruitment procedures relating to the processing of employment applications, advertising, interviewing, short-listing, selecting or rejecting, observe the principle of equal opportunities, and that applicants are fairly selected on merit and suitability for the job in question.

An employer may not, for example, engage or select a person who is less qualified than a person of the opposite sex, unless the employer can prove that the action was based on acceptable grounds related to the nature of the work or on grounds related to previous work performance and experience.

Any new employee should provide the following information:

• a legally valid identification document number,
• sex,
• address of the employee

In the case of a renewal of a fixed-term contract for the same functions and tasks as the previous fixed-term contract, there shall be no new probationary period.

A fixed-term contract cannot be shorter than six months unless there is an objective reason based on precise circumstances that need to be listed in the contract itself.

In the case of a fixed-term contract with a duration of between six and fifteen months, the probationary period shall be calculated on the basis of two months per six-month contract duration.

For a fixed-term contract exceeding fifteen months duration, probation shall be six months.

If the fixed-term contract is of a duration less than six months, the probationary period shall be one-third of the duration of the contract.

Probation can be shorter by agreement between the parties.

Probation is to be suspended in the case that the employee avails himself of leave for more than two weeks. Probation then needs to be extended to a duration corresponding to the amount of leave taken. No dismissal can take place during the suspended period of probation.

There are 14 public holidays.

• January 1 - New Year's Day
• February 10 - Feast of Saint Paul's Shipwreck
• March 19 - Feast of Saint Joseph
• March 31 - Freedom Day
• April 7 - Good Friday
• May 1 - Labour Day/May Day
• June 7 - Sette Giugno
• June 29 - Feast of Saints Peter and Paul
• August 15 - The Feast of Mary's Assumption
• September 8 - The Feast of Our Lady of Victories
• December 8 - Feast of the Immaculate Conception
• December 13 - Republic Day
• December 25 - Christmas Day

The Wage Regulation Order regulates sick leave (WRO). If an employee is not protected by the WRO, he or she is entitled to two weeks of paid sick leave per year. After two weeks, an employee may be eligible for a sickness benefit through Social Security. To use sick leave, you must produce a medical certificate.

In Malta, maternity leave is for 18 weeks and begins four weeks before the due date. Leave must be taken at least 6 weeks following the birth. For the first 14 weeks, the employer is liable for paying 100% of the wages.

There are no provisions in the law regarding paternity leave.

Until the child reaches the age of eight, parents are entitled to four months of paid leave for the birth of a child, adoption, fostering, or general care. To be eligible at least 12 consecutive months.

Annual Leave:

Effective January 1, 2024, There have been modifications to the annual leave entitlement for workers in Malta.

• Employees with a standard 40-hour workweek receive a substantial 240 hours of paid vacation leave.
  • This includes a basic 192-hour leave provision.
  • An additional 48 hours are granted in lieu of six Public Holidays that fall on weekends.
• The total paid vacation entitlement amounts to 30 days.

Pro-Rated Consideration:

The entitlement is subject to pro-ration in cases of reduced working hours.

Bereavement Leave: All employees are allowed paid bereavement leave on the occasion of the death of a close family member. For employees who are not covered by the Wage Regulation Order, 1 working day is allowed.

Marriage Leave: Employees are entitled to paid marriage leave. For employees who are not covered by the Wage Regulation Order, 2 working days are required.

Employers can terminate a fixed-term contract by giving the following reasons – business, personal, or worker misconduct. It requires notice and a written explanation for the termination. If the reason is misconduct, a warning needs to be given, and the employee gets a chance to explain their actions.

In Malta, an employer can terminate an employee for cause, redundancy, or due to reaching the age of retirement. If requested by an employee who has completed at least one month of employment, the employer must provide an employment certificate stating the dates employed and a description of duties (the reason for termination must also be included).

Also, upon termination from employment, an employee has the right to claim financial compensation for any balance of outstanding leave that is due.

The amount of notice required is dependent on the length of service and reason for termination, as follows:

• If an employee has less than one month of service, no notice period is required 
• For an employee with between one and six months of service, one week of notice is required 
• For an employee with between six months and two years service, two weeks notice is required 
• For an employee with between two- and four years service, four weeks notice is required 
• For an employee with between four- and seven years service, eight weeks notice is required 
• For an employee with between seven- and eight years service, nine weeks notice is required 
• For an employee with between eight- and nine years of service, ten weeks notice is required 
• For an employee with between nine- and ten years service, 11 weeks notice is required 
• For an employee with more than ten years service, 12 weeks notice is required 

It is possible to pay the employee in lieu of notice. However, suppose an employee is due to work the notice and chooses not to work during this period or resign without notice. In that case, they are obligated to pay the employer 50.00% of the wages that would have been earned during the notice period.

There are no statutory laws on severance pay.

Malta’s immigration law provides several options for employers of foreign nationals. Malta is a member of the European Union (EU) and the Schengen Area. Requirements, processing times, employment eligibility, and benefits for accompanying family members vary by visa classification.

Business visitors to Malta typically use a local version of the Schengen C Visa unless they are visa-exempt based on their nationality. The Schengen Area limits stay to 90 days within 180 days.

For work, foreign nationals traveling to Malta require a Single Permit, which combines work and residence authorization. The Single Permit can be issued for one year and is renewable.

With regards to background checks, Regulation (EU) 2016/679 of the European Parliament and of the Council, the General Data Protection Regulation (GDPR), and the Data Protection Act (DPA) do not dictate whether an employer can carry out such checks. Once pre-employment vetting occurs and the applicant's personal data is collected, the GDPR comes into play. For instance, any information about an actual or alleged criminal offense constitutes personal data. To process such data, an employer must have a lawful basis for processing, such as a legal obligation or a lawful authority, and failing any of the two, consent.

The GDPR recognizes that consent may be distorted by the power imbalance in the employee-employer relationship. It must be made clear that any offer of employment is not dependent upon consent. An applicant should be given the opportunity to refuse consent without that being prejudicial to their appointment.

Succinctly, any information that the employer gathers in making their background checks must be kept secure and confidential and not be kept for longer than is needed for its legitimate purpose. The applicant has the right to ask to see any information the company may hold on them, which must be supplied within one month.

The employer can hire a third party to conduct such background checks as long as the applicant is made aware of this controller-processor relationship (as defined in the GDPR) between the employer and the third party, where the controller of such data is the prospective employer. The processor is only acting on behalf and the explicit instructions of the controller.