In this Article
The Malta Employment Agencies Regulations shall be officially amended on the 1st of April 2024, through Legal Notice 270 of 2023. Find out the changes that this amendment will bring to the law, and how it affects stakeholders by reading the article below from our Junior Associate, Avv. Diane Dimech. You can also speak to us immediately for any related requests on infomalta@kyprianou.com
Updates in the Regulation
Employment Agencies Regulations (EARs) in Malta
Essentially, the term ‘employment agency’ refers to a natural or legal individual performing any relevant activity in Malta, pertaining to either the recruitment of human resources for employment within or outside of Malta, a temporary work agency, or an outsourcing agency. Consequently, these new regulations seek to regulate employment and recruitment agencies that recruit people for employment in or outside Malta.
What are we to expect from this amendment? Well, the employer, for the valid operation of an employment agency or business, shall either hold a valid licence, or be lawfully established to conduct business within a European Union (EU) Member State. Furthermore, employers must let the Director General of Employment and Industrial Relations (DIER) know that they are granting services as an employment agency within Malta. The licence fee is set at €3,000.00 (Three Thousand Euros) for first time applicants, and €1,500.00 (One Thousand Five Hundred Euros) for its renewal.
First Time Applicants, Renewals and Exceptions.
Employment Agencies Regulations (EARs) in Malta
First time applicants are being given the chance to transition; specifically for two months from when the regulations come into force. Once approved, the licence will be applicable for a period of one year, with a renewal of a year also, and in certain instances, a longer period (not exceeding two years).
Licensed entities must have a competent person. They must reside in Malta and must be either a Maltese or an EU citizen, or a person entitled to equal treatment to citizens of Malta. Furthermore, this person shall bear the responsibility of management and should have the relevant qualifications and experience in managing human resources, as provided by the regulations.
In special instances, certain institutions will not be required to apply for this type of licence. This is pertinent to:
a. Any employer who performs an activity involving recruitment, linked to any employment, in the same employer’s own undertaking.
b. Any recruitment-related activity offered by an employment agency in the name of any employer who has been clearly identified within an advertisement which refers to employment.
c. Any outsourcing agencies, as long as they perform any of the services mentioned within the First Schedule; These include but are not limited to professional services whereby the individual offering such services holds a warrant, or its equivalent, as well as technical services where the individual offering them includes their own technical skills, experience, and thereafter grants services relating to such.
Bank Guarantee and Other Details
Employment Agencies Regulations (EARs) in Malta
Apart from the need to fulfil such requisites, it is also indispensable for applicants to give proof that they are capable of providing a bank guarantee in favour of the Administration Board. The amount of such guarantee shall be that of €20,000.00 (Twenty Thousand Euros) where agencies have less than twenty (20) employees.
Where agencies employ over 20 individuals, not only should they pay the €20,000.00 (Twenty Thousand Euros), they are, however, also obliged to provide 2% of the full annual wages payable to all employees as at the application date, which can amount to a maximum of €300,000.00 (Three Hundred Thousand Euros).
The DIER has the right to refuse an application, revoke a licence or vary any of the licence’s conditions for multiple reasons, including but not limited to failure of the applicant to comply with the provisions of such regulation. In this event, the Department will publicly announce the individual being subject to the sanction’s name and the Administration Board will duly ensure that the bank guarantee is forfeited and placed into the Agencies Guarantee Fund.
In the case that an employee faces termination of employment by a temporary work agency or an outsourcing agency, they are obliged to let the DIER and Administration Board know within two months from the date of this termination consequent to the removal or non-renewal of the licence.
If, however, the Administration Board reviews and confirms that employment was terminated in relation to the latter provision, the employee could benefit from a share of the amount of the bank guarantee- originally provided by the respective employer - whose bank guarantee was forfeited with the revocation or non-renewal.
Conclusion - Make the First Step!
Companies should seek advice as to whether their current operations fall within the scope of the new regulations and, if they do, seek to ensure compliance. Companies must adhere to the updates in regulation and remaining compliant with the law is essential to avoid penalties and setbacks. Meanwhile, you can also check employment law changes brought about by the Legal Notice which came into force back in August 2022 or ask more information about the Employment Agencies Regulations (EARs): infomalta@kyprianou.com
