Planning to hire employees in Malawi? Here’s a quick guide

Malawi’s workforce is growing, young, and increasingly skilled. The labor market in the country is shaped by sectors such as agriculture, NGO-driven development, and financial services. The best thing is that you can hire employees in Malawi at competitive cost structures. 

However, if you want to hire in Malawi, you must have precision with the Malawi Employment Act, registration with the Malawi Revenue Authority, and knowledge of the mandatory employee benefits. You must get the legal groundwork right from the first day to protect your business and employees. 

This guide explores how an EOR, such as Payoneer Workforce Management, supports the hiring process in Malawi, along with assisting in payroll management, taxation, compliance with labor laws, and more. 

How to hire employees in Malawi

If you want to engage talent in Malawi, just like in Kenya,  you can choose from any one of the options mentioned below:

1) Set up a legal entity in Malawi

If you want to set up a legal entity in Malawi, it is typically done through the Malawi Business Registration System (MBRS), operated by the Registrar General. 

The main steps in the process include name searching and reservation, filing the Memorandum/Articles of Association, and securing a TPIN from the Malawi Revenue Authority (MRA). You also need to obtain the necessary operational licenses from local councils. 

It takes several weeks for this process, and it is expensive too. However, employers have more control over administrative operations with this setup

2) Hire independent contractors

You can hire independent contractors in Malawi to complete specific tasks/projects. There should be clear, compliant contracts to avoid any kind of misclassification risks, as it can lead to penalties. Independent contractors are responsible for their own taxes, task management, etc.

However, you may utilize a contractor management system to streamline contracts, payments, and more. 

3) Partner with an Employer of Record

One of the best ways to hire employees in Malawi is to partner with an EOR like Payoneer Workforce Management. An EOR is a third-party agency that helps handle the process of employment in Malawi. 

Along with assistance in hiring, the EOR service also helps with employee onboarding, compliance with local laws and employment regulations in Malawi, payroll management, leave entitlements, and more. 

Where to find employees in Malawi

Here are some of the best options where you can find employees in Malawi:

1. Online job portals

There are many online job portals in Malawi, displaying various job profiles. Some of the most popular options include:

• Malawi Jobs
• JobSearch Malawi
• Indeed Malawi
• LinkedIn

2. Malawi universities 

If you are looking for graduate-level hires for certain profiles, you can get in touch with the leading universities in Malawi, such as Mzuzu University and the University of Malawi. 

3. Recruitment agencies and development networks

There are many local staffing firms and recruitment agencies in Malawi offering on-the-ground candidate screening and shortlisting. 

The development networks are ideal for sourcing experienced professionals with international work exposure. 

4. EOR services

Another great way to engage employees in Malawi is with the support of an EOR service such as Payoneer Workforce Management. The EOR service supports the hiring process in Malawi, including employment contracts, payroll, taxation, compliance, and more. This gives you more time to identify suitable talent for the requirements.

Onboarding employees in Malawi

All new employees in Malawi have to go through an onboarding process. The employers and employees must stay compliant with the local employment regulations in Malawi. 

Here are the details of the onboarding process:

• The employee gets a written employment contract compliant with the Malawi Employment Act. The contract mentions job role, salary, working hours, termination terms, and more. 
• The employee must be registered with the Malawi Revenue Authority for PAYE tax deductions before their first payroll. 
• Next, the employee has to enrol with the National Pensions Act for mandatory pension contributions. 
• The employee is made aware of the company policies, workplace conduct ethics, leave entitlements, etc. 
• The next step is payroll setup, including bank account details and salary payment schedule. 
• There is a structured orientation covering reporting lines, responsibilities of the job profile, and organizational culture. 

Key employment laws in Malawi

The Malawi Employment Act is the main legislation governing employment regulations in Malawi. The legislation covers working hours, employment contracts, leave entitlements, termination, and employee rights. 

Apart from this, there are other laws related to employment in the country. Some of them are as follows:

• Labor Relations Act: This act regulates trade union rights, collective bargaining, and dispute resolution between employees and employers. 
• Malawi Revenue Authority (MRA) PAYE Regulations: The regulations govern income tax deductions at source. Employers have to withhold and remit taxes monthly. 
• Occupational Safety, Health and Welfare Act: This act mandates safe working conditions for employees. The employer remains responsible for workplace health and safety standards. 
• National Pensions Act (CAP 55:02): This act requires mandatory pension contributions from both employees and employers for all eligible workers. 

Along with the employment laws, there are other things to keep in mind for employees. Some of them are as follows:

Employment contracts

Employment contracts in Malawi are governed by the Malawi Employment Act. Here are some of the common contract types in the country:

• Permanent or indefinite employment contract – Such employment contracts are for permanent employees. These contracts do not have an end date. 
• Fixed-term or definite employment contract – Fixed-term employment contracts are for a fixed period. These contracts have an end date. In many cases, such contracts are renewed when needed. 

According to the Malawi Employment Act, the employment contract should be given to the employee in written format. Mentioned below are some of the key components that should be in the employment contract. 

• Names of the employer and the employee
• Starting date of the employment contract
• The rate of remuneration
• Roles and responsibilities of the employee and the nature of work
• Normal working hours with overtime hours, if any
• Allowances, bonuses, and other benefits
• Leave entitlements
• Probation period and notice period
• Termination 

Employee benefits

Employees in Malawi are entitled to certain benefits from their employers. Some of the prominent ones are as follows:

Working hours in Malawi

According to the Employment Act, the working hours for employees in Malawi cannot exceed 48 hours per week or 8 hours per day. 

Overtime in Malawi

Employees in Malawi can work overtime hours. They are duly compensated for the same.

• For ordinary overtime, employees get at least 1.5x the regular hourly wage. 
• For overtime on a day off or on holiday, employees get at least 2x the regular hourly wage. 

Employer’s tax obligations

Taxation and social security obligations are mandatory for employers in Malawi. When you think of how to hire in Malawi, you have to keep these things in mind. 

• The individual income tax in Malawi has a progressive pattern from 0% to 30%. 
• According to the Malawi Revenue Authority, under the Pensions Act, employers have to contribute a minimum of 10% and deduct a minimum of 5% from employees as pension contributions. 

Termination and severance pay in Malawi

The Employment Act and its amendments govern employment termination in Malawi. According to the employment regulations in Malawi, there should be justifiable reasons for termination. There are various procedural requirements as well. 

In case an employer terminates an employee on invalid grounds, it is considered unfair dismissal. This leads to serious legal complications and hassles. Terminations are complex processes and should be handled carefully and delicately. 

Here are some common termination scenarios in Malawi:

• Mutual termination agreement between the employer and employee
• Voluntary employee resignation
• Termination during the probationary period with shorter notice requirements
• Termination by the employer due to incapacity for long-term illness or injury, misconduct, redundancy or incompetence, and poor performance. 

Notice period

The notice period during probation is at the employer’s discretion or as per the contract. After the probation period, employees have to serve a notice period of 1 month. 

Severance pay

Severance pay in Malawi is covered under the Employment Act. This is paid in cases of incapacity, redundancy, or lawful termination without cause. 

Explore Payoneer Workforce Management in Malawi

Payoneer Workforce Management helps engage talent in Malawi and offers efficient workforce management in Malawi, not only by helping to streamline the hiring process but also by navigating compliance, payroll management, taxation, and more. 

Offering services in more than 160 countries, Payoneer Workforce Management has become a coveted choice for many employers worldwide. 

Book a demo today!

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