Employment laws in Malawi
Navigate the employment laws in Malawi with confidence. Learn about hiring, employment contracts, wages, and labor law compliance in Malawi.
Malawi has a rapidly evolving economy. Understanding the employment laws in Malawi is not just a legal obligation but also a strategic advantage. Rooted in the Labor Relations Act and the Malawi Employment Act, the labor laws in Malawi govern employment contracts, minimum wages, working hours, workplace safety, and termination.
This guide outlines Malawi’s employment laws and employees’ rights. It is also mandatory to comply with Malawi’s labor laws to reduce penalties.
Along with exploring the employment laws in Malawi, let us see how an EOR like Payoneer Workforce Management helps manage onboarding, payroll, employee lifecycle processes, compliance, and more.
Key employment laws in Malawi
The Malawi Employment Act governs the primary employment regulations in Malawi. The legislation regulates and reinforces the minimum standards of employment, including employment contracts, working hours, employee rights, leave entitlements, termination, and more.
Apart from this primary act, there are other labor laws in Malawi, just like Kenya. Some of the prominent ones are as follows:
- National Pensions Act (CAP 55:02): The National Pensions Act covers details on mandatory pension contributions from both employers and employees for all eligible workers.
- Labor Relations Act: This act primarily regulates collective bargaining, trade union rights, and dispute resolution between employers and employees.
- Malawi Revenue Authority (MRA) PAYE Regulations: These regulations oversee income tax deduction at source. It is the responsibility of the employer to withhold and remit taxes every month.
- Occupational Safety, Health, and Welfare Act: It is evident from the name that this act ensures safe working conditions for the employees in Malawi. Typically, the employer has to take responsibility for the workplace health and safety standards.
Contract employment laws in Malawi
The Malawi Employment Act covers the employment contracts in Malawi.
The employment contract must be in writing and given to the employee before commencing the employment contract. The contract must contain all the necessary terms and conditions in detail.
Types of contract
Employment contracts in Malawi are of different types. Some of the most common types include:
- Indefinite or permanent employment contract – Permanent employees have an indefinite contract with no end date. Once the employee retires, there is another hiring for the position.
- Fixed-term employment contract – Evident from the name of the employment contract, these contracts have a fixed end date. Fixed-term contracts often have renewal options if there is a need for the same.
Essential contract terms
Mentioned below are the key contract terms that must be included in employment contracts in Malawi.
- Identity, including the name and address of the employer and employee
- Date of commencement of the employment contract
- Wage/salary of the employee
- Job profile and responsibilities of the employee
- Working hours with overtime hours, if any
- Bonuses, allowances, and other benefits
- Leave entitlements
- Probation period and notice period
- Termination
Minimum wage in Malawi
Minimum wage in Malawi is not applicable according to local legislation.
Working hours in Malawi
As per the Malawi Employment Act, employees in the country have fixed working hours. Working hours in Malawi cannot exceed 8 hours per day or 48 hours per week.
There are overtime laws in Malawi as well. Employees get additional remuneration for working overtime hours in the country.
- For general overtime, employees get a minimum of 1.5x the regular hourly wage.
- If an employee works overtime on a holiday or a day off, they get compensated at a minimum of 2x the regular hourly wage.
Mandatory benefits
Workers can enjoy employee rights in Malawi. Employers have to provide some mandatory benefits to the employees to which they are entitled. Some important benefits are as follows:
| Mandatory benefits | Details |
|---|---|
| Public health insurance | Employees are not entitled to any public health insurance in Malawi. |
| Private health insurance | It is optional for employers to provide private health insurance in Malawi. |
| Social security benefits | The mandatory National Pension Scheme (NPS) is an important part of the social security scheme in Malawi. With recent reforms, there has been an expansion in the coverage, with voluntary savings features and flexible withdrawal options. Employer’s contributions are a minimum of 10% of the employee’s pensionable earnings. The minimum contribution of employees is 5%. |
| Sick leave | Permanent employees are entitled to sick leave in Malawi for a maximum of 90 days with half pay. |
| Maternity leave | Female employees in Malawi are entitled to fully-paid maternity leave for 2 months. |
| Paternity leave | New fathers in Malawi are eligible for a minimum of 2 weeks (10 working days) of paternity leave with full pay. Employees are entitled to this leave once every 3 years. |
| Annual bonus | An annual bonus for employees is not mandated by law in Malawi. However, employers can provide a complimentary bonus in accordance with the employer’s internal policy. |
| Annual leave and public holidays | Employees are entitled to annual leave in Malawi. The number of days of leave depends on the work week format. For a 5-day work week format, the employee is entitled to 15 days of annual leave per year. For a 6-day work week format, the employee is entitled to 18 days of annual leave per year. In Malawi, there are 16 public holidays every year. |
Termination
The various aspects of employment termination in Malawi are mentioned in the Malawi Employment Act and its amendments.
As per the termination laws in Malawi, there must be valid reasons for employee termination. The termination procedures are long and elaborate.
If an employee feels that the employer has terminated employment wrongfully, it is considered unfair dismissal.
In such situations, the employer has to face serious legal hassles and complications. Each termination case is different and must be handled accordingly.
Types of termination scenarios
In Malawi, there are different types of scenarios in which employee termination takes place. They are as follows:
- Termination by the employer for incompetence or poor performance, misconduct, incapacity to work due to long-term injury or illness, redundancy, and so on.
- Mutual termination agreement between the employee and the employer.
- Voluntary resignation of the employee.
- Termination of employment during the probationary period.
Notice period in Malawi
During the probation period in Malawi, the notice period is as per the client’s request.
However, after probation, the notice period in Malawi is 1 month.
Severance payable
Employees are entitled to severance pay in Malawi in cases of incapacity, redundancy, or lawful employment termination without a valid cause. All this is covered in the Malawi Employment Act.
The amount of severance pay in the country depends on the service tenure of the employee.
| Number of years of service | Severance pay |
|---|---|
| Less than 1 year of employment | No severance pay |
| 1 to 5 years of employment | 2 weeks’ pay for every completed year |
| More than 5 years of employment | 1 month’s pay for every completed year |
Navigate employment laws in Malawi with trusted support
Many employers find it challenging to understand the employment laws in Malawi. This directly impacts labor law compliance in Malawi, leading to legal consequences and penalties for the employer. Penetrating the local markets also becomes difficult without proper knowledge of the local labor laws in Malawi.
Payoneer Workforce Management, a trusted EOR service, offers assistance in navigating the employment laws in Malawi and complying with the labor law regulations. While helping with compliance, the EOR service primarily extends support with onboarding, administering benefits entitlements of employees, payroll management, taxation, leave management, and more.
Frequently asked questions (FAQs)
An EOR service like Payoneer Workforce Management can support you in navigating employment laws in Malawi, along with key employment aspects like onboarding, payroll, benefits, terminations, and more. Many employers find it difficult to understand and implement the labor laws in Malawi, and an EOR can help you with the same.
Yes, female employees in Malawi are entitled to maternity leave for 2 months. The maternity leave is fully paid.
Lawful termination in Malawi requires valid grounds such as misconduct, redundancy, or poor performance. Employers must follow due process, including notice periods and fair hearings, to avoid wrongful dismissal claims.
Employers have to provide a written contract to employees in Malawi. This is important for clarity and legal protection. Contracts should outline job role, salary, working hours, and termination terms to be mutually binding.
Employers in Malawi must provide certain mandatory benefits, including 15-18 paid annual leave, 16 public holidays, 90 days of sick leave, and 2 months of paid maternity leave. Employers are also required to contribute to pension and social security schemes in line with local regulations.
During the probation period in Malawi, the notice period is based on the employer’s requirements or the employment contract. After probation, the standard notice period is generally 1 month.
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