US vs Malta Employment Law: What US Employers Need to Change
Malta’s Employment and Industrial Relations Act replaces at-will habits with probation, statutory notice and a cause requirement. Here is what changes for a US employer.
Key thresholds in Maltese law
The core difference between US and Malta employment law is that Malta has no at-will employment after probation. An employer needs good and sufficient cause to end an indefinite contract, must give notice of up to 12 weeks, and has to provide paid leave that US federal law leaves optional.
How does at-will employment compare with good and sufficient cause?
The biggest legal difference is that Malta does not allow at-will dismissal once probation is over. In most US states an employer can end employment at any time, for any reason that is not unlawful, and without notice. Under Malta’s Employment and Industrial Relations Act (Cap. 452), an employer can end an indefinite contract after probation only for good and sufficient cause.
In practice, good and sufficient cause is usually linked to misconduct, performance problems that have been properly raised and addressed, or a genuine redundancy. Where the reason is redundancy, Maltese law expects last-in-first-out within the affected class of employees. The dismissed employee also has a right to re-employment for 1 year if the post becomes available again.
Disputes go to the Industrial Tribunal, and an unfair dismissal claim must be filed within 4 months of termination. The Tribunal can award compensation, so the records behind a dismissal matter far more in Malta than in an at-will state. Our guide to terminating employment in Malta sets out the process step by step.
What notice periods does Maltese law require?
Maltese law sets minimum notice periods that grow with continuous service, and both employer and employee must respect them. With more than 1 month and up to 6 months of service, notice is 1 week. It is 2 weeks for service of more than 6 months up to 2 years, 4 weeks for more than 2 up to 4 years, and 8 weeks for more than 4 up to 7 years. After 7 years, a further week is added for each extra year of service, up to a maximum of 12 weeks.
Technical, administrative, executive and managerial staff may agree longer notice in their contracts. An employer that ends employment without giving notice owes full wages for the unexpired period. An employee who leaves without notice owes the employer half the wages for that period. Where the employer has given notice, the employee may leave early and claim half the wages for the notice that remains.
No notice is due where there is good and sufficient cause for summary dismissal. Malta has no statutory severance pay, which US employers will find familiar, but notice pay and any Tribunal award still belong in the budget. Our US vs Malta employer costs comparison puts these amounts next to payroll taxes.
How does probation work in Malta?
Probation in Malta is set by law at 6 months by default for indefinite contracts, or 1 year for technical, executive, administrative or managerial roles paid at least twice the national minimum wage. The parties can agree a shorter period. A US offer letter may mention an introductory period with little legal effect, whereas in Malta the probation date changes what the employer is allowed to do.
During probation either party can end the contract without giving a reason. Once the employee has completed 1 month of service, 1 week’s notice applies. Probation is suspended during absences of 2 weeks or more, such as long sick leave or maternity leave, so the end date can move.
On fixed-term contracts, probation is pro-rata and capped at 6 months. Successive fixed-term contracts may last a maximum of 4 years in total before the employee is treated as indefinite, unless there is an objective justification. Ending a fixed-term contract early after probation costs the terminating party half the wages for the rest of the term.
Treat the end of probation as a real decision point in Malta. Hold a documented review a few weeks before the date, because once it passes the good and sufficient cause rule applies.
What must a Maltese employment contract contain?
Malta requires a written statement of the main terms of employment, while most US employment rests on an offer letter and handbook with far fewer mandatory contents. Under the Transparent and Predictable Working Conditions Regulations (S.L. 452.126), DIER guidance says the statement is due within the first 7 calendar days. It covers items such as probation, wages, hours, leave, notice and any collective agreement that applies.
Minimum terms also come from sector rules. Wage Regulation Orders set floors for pay, hours, overtime and leave in many industries, and collective agreements add to them where they exist. A US employer used to a federal minimum plus state law should check which Wage Regulation Order, if any, covers each Maltese role.
There are filing duties as well. The employer submits the Jobsplus engagement form within 4 working days of the start date, and a termination form within 4 days of the employment ending. Following a 2025 amendment to the Employment and Industrial Relations Act, fines for first offences range from €2,000 to €5,000.
Clauses copied from US handbooks, such as a statement that employment is at will and can be ended at any time, have no effect in Malta and can mislead staff. Remove them from any template you reuse for a Maltese hire.
How do working time rules differ between the US and Malta?
Malta caps average working hours and guarantees rest periods for employees, while US federal law mainly regulates overtime pay for non-exempt staff and sets no general cap on adult working hours. The standard week in Malta is 40 hours, although a Wage Regulation Order can set a different figure.
Average weekly working time in Malta may not exceed 48 hours over a 17-week reference period, extended to 1 year in manufacturing and tourism. An employee can opt out of the limit in writing and withdraw the opt-out later with notice of between 7 days and 3 months. An employee who refuses to opt out cannot be victimised for it.
Rest rules are firm. Employees are entitled to 11 hours of daily rest, weekly rest of 24 hours in each 7-day period or 48 hours in each 14-day period, and a break of at least 15 minutes when the working day is longer than 6 hours. Rest cannot be replaced with extra pay.
Overtime rates in Malta come mostly from Wage Regulation Orders, many of which set time and a half. Senior and managerial contracts often include overtime in the salary. Qualifying overtime also benefits from a 15% tax rate on the first €10,000, subject to conditions.
What leave must employers give in Malta?
Malta requires paid annual leave, paid sick leave and several forms of paid family leave, while US federal law does not require employers to pay for any of these. A full-time employee in Malta receives 192 hours of annual leave, plus a day for each public holiday that falls on a weekend, which gives 216 hours (27 days) in 2026. At least 160 hours cannot be paid out instead of taken, except on termination.
- Sick leave: at least 80 hours a year on full pay where no Wage Regulation Order applies, less any state sickness benefit.
- Maternity leave: 18 weeks, with the first 14 paid by the employer and reclaimable from the Maternity Leave Trust Fund.
- Birth leave for the second parent: 10 working days on full pay.
- Parental leave: 4 months per parent per child, of which 8 weeks are paid at the sickness benefit rate.
- Miscarriage leave and special parental bereavement leave: 7 working days on pay each, introduced from 1 January 2026.
Malta also has 14 public holidays and gives employees 32 hours of urgent family leave a year. Fixed-term employees are entitled to equal treatment with comparable indefinite staff, and anti-discrimination and health and safety rules apply to everyone on the payroll.
How does Malta decide who is an employee?
Malta uses a fixed checklist: a worker is treated as an employee if at least 5 of the 8 criteria in the Employment Status National Standard Order (S.L. 452.108) apply. US employers deal with several different tests at federal and state level, so a single written list can look simpler, yet it catches many long-term contractors.
The criteria include depending on one client for at least 75% of income, having that client decide the work, the hours and the equipment, being unable to send a substitute, and doing work that is core to the business or similar to what employees do. A contract label saying otherwise has no effect. A worker found to be an employee gains full employment rights, and the business can face back social security, FSS tax and penalties. Our misclassification guide walks through each criterion.
For a US company without a Maltese entity, the simplest compliant route is often an Employer of Record Malta service. Our own Maltese company becomes the legal employer, issues a contract that meets Maltese rules, and manages probation dates, notice and Jobsplus filings, which also removes the contractor risk. Our EOR services page lists what is included.
Frequently asked
Q01Is at-will employment allowed in Malta?
Q02Can I dismiss an employee during probation in Malta?
Q03Is severance pay mandatory in Malta?
Q04Can I use my US employee handbook in Malta?
Q05Which law governs employment in Malta?
Hire in Malta without rewriting your HR playbook alone.
Our Maltese company employs your team, issues compliant contracts and handles probation, notice and filings, so your managers can focus on the work.