Malta’s Employment Law in 2025: Pay Transparency and Tougher Enforcement take Centre Stage

The summer of 2025 marked a significant turning point for employment law in Malta. Two key reforms were introduced: new pay transparency obligations under the Transparent and Predictable Working Conditions Regulations (Legal Notice 112 of 2025), and tougher enforcement mechanisms under the Employment and Industrial Relations Act (Act XIV of 2025).

These developments, one driven by EU directive and the other by national enforcement priorities, are reshaping employer obligations in practical ways. Companies now face more stringent duties during recruitment, greater exposure when employees request information, and heavier penalties if they fall short of their legal obligations.

The summer of 2025 marked a significant turning point for employment law in Malta. Two key reforms were introduced: new pay transparency obligations under the Transparent and Predictable Working Conditions Regulations (Legal Notice 112 of 2025), and tougher enforcement mechanisms under the Employment and Industrial Relations Act (Act XIV of 2025).

These developments, one driven by EU directive and the other by national enforcement priorities, are reshaping employer obligations in practical ways. Companies now face more stringent duties during recruitment, greater exposure when employees request information, and heavier penalties if they fall short of their legal obligations.

Pay Transparency Obligations

Legal Notice 112 of 2025, published in the Government Gazette on 27 June 2025 and in force from 27 August 2025, amended the Transparent and Predictable Working Conditions Regulations andforms part of Malta’s transposition of the EU Pay Transparency Directive (Directive (EU) 2023/970).

What has changed:
  • Disclosure to job applicants. Employers must now inform prospective employees of the salary or salary range for the role, as well as any applicable collective agreement provisions, before the commencement of employment. Previously, Maltese law did not impose any such obligation. Notably, this goes somewhat less far than the Directive, which envisages disclosure before the interview stage.
 
  • Rights of existing employees. Any employee may submit a written request to obtain (i) their own gross annual and hourly pay, and (ii) the average pay levels of employees performing the same or equivalent work. Employers must provide this information within two months.
 
  • Scope of “pay.” The term covers not only base salary but also allowances, overtime, bonuses, commissions, holiday remuneration, and statutory bonuses and weekly allowances.

The rules apply across all sectors and to all employers in Malta, regardless of size, and extend to part-time and fixed-term employees.

Although the 2025 amendments represent a significant step forward, they amount to only a partial transposition of the EU Pay Transparency Directive. The more far-reaching obligations such as mandatory gender pay gap reporting, joint pay assessments and additional employee rights must still be implemented by the EU deadline of 7 June 2026. Employers in Malta should therefore treat the current reforms as the beginning of a broader compliance journey and use the coming months to prepare for these further measures.


Stricter Enforcement under EIRA

With the enactment of Act XIV of 2025, published on 6 June 2025 and entering into force on 6 August 2025, the Employment and Industrial Relations Act (EIRA) was substantially amended. The reform signals a clear policy choice by the Maltese legislator to move away from modest sanctions and towards a regime that treats compliance with employment law as a serious obligation.
 
Longer Prescriptive Period
One of the most notable changes is the extension of the prescriptive period for prosecuting offences under EIRA. Where previously complaints and proceedings had to be initiated within one year, employers must now be aware that claims may be brought up to two years after the alleged infringement. This provides both the Department of Industrial and Employment Relations (DIER) and the police with more time to investigate breaches and pursue enforcement action, increasing the likelihood of proceedings being initiated.
 
Higher Fines
The second major development lies in the level of penalties. The fine structure has been significantly revised, with first offences now attracting penalties ranging from €2,000 to €5,000, compared to the previous range of €232.94 to €2,329.37. For repeat offences, fines have been set between €5,000 and €7,000. This represents a decisive shift towards sanctions that are no longer merely administrative inconveniences, but meaningful deterrents capable of influencing employer behaviour.

Practical Implications for Employers
The amendments alter the compliance landscape in concrete ways. Employers can no longer rely on the short prescriptive period or modest fines as a shield against liability. Instead, businesses must:
  • Reinforce compliance monitoring: extending the timeframe for potential liability means internal audits and regular monitoring should become routine.
  • Maintain accurate records: with complaints potentially surfacing up to two years later, robust record-keeping is essential to respond effectively to investigations.
  • Treat compliance as strategic, not administrative: the financial and reputational risks associated with the new fines elevate employment law compliance to a board-level priority.
Looking ahead
Taken together with the pay transparency obligations introduced in the same year, these amendments demonstrate Malta’s broader commitment to strengthening workers’ rights and aligning with EU-driven standards. Employers who act proactively by tightening compliance frameworks, auditing employment practices, and investing in HR training will be best positioned to mitigate risk in this more stringent enforcement environment.

Sources:
  • Legal Notice 112 of 2025 – Transparent and Predictable Working Conditions (Amendment) Regulations, 2025, published in the Government Gazette No. 21,460 on 27 June 2025, effective 27 August 2025. https://legislation.mt/eli/ln/2025/112/eng // https://legislation.mt/eli/act/2025/14/mlt
  • Act XIV of 2025 – Employment and Industrial Relations (Amendment) Act, 2025, published in the Government Gazette No. 21,450 on 6 June 2025, effective 6 August 2025.
  • Directive (EU) 2023/970 of the European Parliament and of the Council of 10 May 2023 – on strengthening the application of the principle of equal pay for equal work or work of equal value between men and women through pay transparency and enforcement mechanisms (the “EU Pay Transparency Directive”).
  • Employment and Industrial Relations Act (Cap. 452 of the Laws of Malta) as amended by Act XIV of 2025.
  • Department of Industrial and Employment Relations (DIER), Malta – Pay Transparency FAQs (2025) – clarifying scope, definitions of “pay,” and employers’ obligations under Legal Notice 112 of 2025.
  • DIER Guidance on Enforcement (2025) – outlining the extension of the prescriptive period and updated fine structure under Act XIV of 2025.
  • GVZH – New Amendment to EIRA Comes into Force Today (Act XIV of 2025).


Kyle Buhagiar, Junior Lawyer