Hiring in Malawi: the work permit, the contract and what comes off pay, step by step

Move someone who is already in Malawi

A Temporary Employment Permit is issued for a specified occupation in a specified area. It is renewed only while the holder is still in the employment it was issued for. A foreign national moving to a different job needs a permit for that job.

A Malawian citizen needs no permit. Their move turns on the notice their current contract sets, which is at least a month in writing for monthly-paid staff on an open-ended contract.

Check the role is open to a non-Malawian

Vacancies in Malawi are offered first to qualified Malawian nationals. A post goes to an expatriate only where a shortage of the skill in Malawi is shown. The application shows the post was advertised locally and that no suitably qualified person could be found.

The application names a qualified Malawian who will understudy the expatriate and eventually take over the post. Working or being employed without a Temporary Employment Permit is a criminal offence under the Immigration Act.

Set the contract up right

A contract of employment is for an unspecified period, a specified period, or a specific task. A contract said to be for a fixed period or a task, which in fact fills a lasting post in the normal work of the business, is treated as open-ended.

An employer of five or more employees gives each one a written statement of particulars within a month of their reporting for work. It names the employer and the employee, the start date, the pay and how it is worked out, when it is paid, the work, the normal hours, any terms for ending the contract beyond the Act's, and the disciplinary rules.

Probation applies only to a skilled worker, for a period both sides agree of up to 12 months. During it, either side can end the contract without notice.

Wages are paid in legal tender, at least once a month for staff paid monthly. Each payment comes with an itemised statement of gross wages, every deduction and net wages.

The working week is up to 48 hours, excluding overtime. Someone who normally works five days a week works no more than 12 hours a day, and someone who works six days no more than eight. Nobody works more than six days in a row without a rest of at least 24 consecutive hours. Overtime on a working day is paid at one and a half times the hourly wage at least. Work on a day off is paid at twice the hourly wage at least. Work on a public holiday is paid at twice the normal hourly rate at least.

A pregnant or breastfeeding employee can work flexible or shorter hours without losing pay or benefits.

Know the employee test before you engage a contractor

Malawi's Employment Act treats as an employee anyone who offers their services under an oral or written contract of employment, express or implied. It also covers anyone who works for another person for pay, where they depend on that person economically and are bound to perform duties for them, in a way closer to employment than to an independent contractor.

A post that needs a Temporary Employment Permit goes through employer of record.

Know what comes off pay each month

Pension is at least 10% of pensionable earnings from the employer and 5% from the employee. It is paid to the pension fund's trustee within 14 days of the end of the month. Pensionable earnings are guaranteed wages and other earnings, without personal investment income, capital gains, or a house or car the employer provides. The employer can choose to pay part or all of the employee's share.

On top, the employer keeps a life insurance policy for each employee, with cover equal to a year's pensionable earnings.

Income tax is withheld on monthly bands. Nothing is due on the first MWK 170,000. Then 30% is due up to MWK 1,570,000, 35% up to MWK 10,000,000 and 40% above it.

The TEVET levy is 1% of the previous year's basic emoluments. The employer pays it, and never deducts it from pay.

Workers' compensation is funded by assessments the employer pays to the Workers' Compensation Fund.

Know the leave your people are entitled to

End employment on the law's terms

An open-ended contract paid monthly ends on at least a month's written notice from either side. A fixed-term contract needs at least 14 calendar days. Either side can waive notice or accept pay instead.

A dismissal needs a valid reason, connected with the employee's capacity or conduct or with the operational needs of the business. Where it concerns capacity or conduct, the employee has a chance to answer the allegations first. In a complaint, the employer has to give the reason for the dismissal. It also has to show it acted with justice and equity. Summary dismissal is for serious misconduct, habitual or substantial neglect, lack of a skill the employee claimed, wilful disobedience, or absence without permission or a reasonable excuse.

Severance is owed on a redundancy or retrenchment, on a termination for economic, technical, structural or operational reasons, and where a dismissal is found unfair. From one year's service, it is two weeks' wages for each completed year up to five years. Each completed year from the sixth to the tenth adds three weeks, and each from the eleventh on adds four. Wages here include basic salary and housing, car and transport allowances.

An employee can complain to the District Labour Officer of an unfair dismissal within three months. Where it is not settled within a month, it can go to the Industrial Relations Court. Where the Court finds the dismissal unfair, it can order reinstatement, re-engagement or compensation. The compensation it awards is at least a week's pay for each year of service where the employee served up to five years, two weeks' where up to ten, three weeks' where up to fifteen, and a month's beyond. Where an order to reinstate or re-engage is not complied with, a special award of twelve weeks' wages is added.

Wages and other remuneration due are paid within seven days of the end of the contract. On request, the employer gives a certificate of termination.

See what is reviewed, and when

A minimum wage is set by a wages order the Minister publishes in the Gazette, for the group of workers it covers. Nobody in that group is paid below its minimum.