Malta's employment law regime has never been static. But recent regulatory updates to employment legislation introduce obligations that foreign employers – and international businesses with staff in Malta – cannot afford to overlook. Companies that delay review of their current arrangements risk non-compliance penalties and exposure to unfair dismissal claims.
Malta's updated employment regulations, which took effect in early 2025, strengthen requirements around the written employment contract, dismissal notice periods, and social security registration for all employees working in Malta. Foreign employers engaging Maltese-resident staff – whether directly or through secondment – must audit existing contracts and procedures against the new rules. The principal compliance deadline for updating documentation falls within 90 days of the regulations coming into force.
This alert explains what changed, which business categories are affected, and the concrete steps international companies must take immediately to maintain compliant employment operations in Malta.
What changed and when it took effect
Malta's employment legislation has been amended to align more closely with updated EU labour standards and to address gaps identified by the Department of Industrial and Employment Relations (Dipartiment tar-Relazzjonijiet Industrijali u tal-Impjieg, or DIER). The changes entered into force in early 2025 and cover three principal areas.
Written employment contracts. Every employee working in Malta must now receive a written employment contract within seven calendar days of commencing work. Previously, employers had greater flexibility on timing. The contract must specify working hours, place of work, remuneration structure, and applicable collective agreement where one exists. An employment contract that omits any mandatory clause is deemed deficient under the updated rules – and the employer bears the burden of rectification.
Dismissal notice and termination procedure. Minimum dismissal notice periods have been revised upward for employees with longer service. The calculation method for notice entitlements has also been clarified, removing ambiguity that had previously produced inconsistent outcomes. Employers must now document the grounds for termination in writing before initiating the dismissal process. Failure to follow the prescribed termination procedure – even where the substantive reason for dismissal is sound – can expose an employer to liability before the Industrial Tribunal (Tribunal Industrijali).
Social security and registration obligations. Foreign employers engaging staff in Malta must register with the Maltese social security system and ensure correct contribution rates are applied from the first day of employment. The updated rules close a previous loophole under which some foreign employers delayed registration pending confirmation of a permanent assignment. That approach is no longer defensible.
A further update concerns collective agreement applicability. Where a sectoral collective agreement exists in the relevant industry, its terms now automatically apply to all employees in that sector – including those employed by foreign entities operating in Malta. Employers must identify whether their sector is covered and adjust remuneration and working conditions accordingly.
For employers in sectors such as hospitality, construction, financial services, and logistics, these changes have immediate practical consequences. Legal practitioners advising on employment law in Malta are already managing a significant volume of contract review and remediation work arising from these updates.
Which employers are affected and the compliance threshold
The updated regulations apply to all employers engaging individuals who perform work in Malta. This includes:
- Foreign companies with a registered branch or subsidiary in Malta
- EU and non-EU businesses seconding employees to Malta for any duration
- Remote-work arrangements where the employee is resident and works from Malta
- Employers using Maltese employment agencies or professional employer organisations
There is no minimum headcount threshold. A foreign employer with a single employee in Malta is subject to the same obligations as a large multinational. This is a point that frequently surprises international businesses, particularly those that treat Maltese-resident remote workers as falling outside local employment legislation. They do not.
Companies incorporated abroad but conducting commercial activity in Malta – even without a formal local entity – may also fall within scope. Malta's employment legislation applies based on where work is performed, not where the employer is domiciled. Businesses uncertain about their exposure should also consider the corporate law implications of operating in Malta without a registered presence. a full picture of those obligations is available in our overview of corporate law in Malta.
The principal compliance deadline is 90 days from the date the regulations entered into force. For most affected employers, this means the window for updating existing employment contracts and internal procedures is already running. Employers who took on Maltese-based staff before the effective date must review and, where necessary, reissue contracts. New hires must receive compliant contracts from day one.
To receive an expert assessment of your compliance position under Malta's updated employment rules, contact us at info@ferrazwhitmore.com.
Immediate actions required for international companies
Foreign employers should treat the following as a priority checklist. Each item addresses a specific risk created or sharpened by the regulatory changes.
1. Audit all Maltese employment contracts. Review every contract against the updated mandatory content requirements. Pay particular attention to notice provisions, place-of-work definitions, and remuneration clauses. Contracts that were compliant before the changes may now be deficient on one or more points.
2. Verify social security registration status. Confirm that the employer is registered with the Maltese social security system and that contribution rates for all Maltese-based employees are correctly applied. If registration has not been completed, initiate it immediately – retroactive liability can accrue from the first day of employment.
3. Identify applicable collective agreements. Determine whether any sectoral collective agreement covers your industry in Malta. If one exists, map its minimum terms against your current contracts and adjust where the agreement provides higher entitlements.
4. Document termination procedures. Update your internal HR procedures to require written documentation of grounds for dismissal before any termination process is initiated. Train managers and HR personnel on the revised dismissal notice requirements.
5. Review secondment and remote-work arrangements. For employees seconded to Malta or working remotely from Malta, confirm that Maltese employment legislation applies and that contracts reflect the correct governing law and mandatory local protections. A blanket assumption that the home-country contract governs is not sufficient under Maltese law. For context on how similar developments are unfolding in nearby jurisdictions, see our related alert covering employment regulation changes in Portugal.
Companies that complete this audit promptly and remediate any deficiencies are well positioned to avoid enforcement action by DIER and to defend any employee claims that may arise. Those that delay face the dual risk of regulatory penalties and weakened defences before the Industrial Tribunal.
About Ferraz & Whitmore
Ferraz & Whitmore is an international law firm based in Lisbon, advising business clients across 46 jurisdictions. Our employment law practice covers Malta and the broader EU, supporting international employers in meeting their obligations under local employment legislation – including employment contract drafting, collective agreement analysis, and termination procedure compliance. Engaging a lawyer in Malta with cross-border experience is particularly valuable when a foreign employer's home-country HR practices do not map directly onto Maltese requirements. As an international law firm serving the Maltese market, we work with multinational businesses, EU-based groups, and third-country employers who need practical, results-oriented counsel. Our attorneys have advised on employment matters across both civil law and common law systems, and our Lisbon base provides direct access to EU regulatory developments affecting employers throughout the region. To discuss your employment compliance position in Malta, contact us at info@ferrazwhitmore.com.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.