The Employment Agencies Regulations of 2023 come into force 1st April 2024.
The Regulations introduce a new regime for regulating the services provided by employment agencies, which were largely unregulated. These Regulations apply to employment agencies that provide recruitment services, temporary work services and/or outsourcing services.
The Regulations impose mandatory licensing, applications for which will start to be accepted by DIER as of 1st January 2024. The application process will include vetting by the police force and licence fees have been set to be €3,000 for first time applicants, and €1,500 for application renewals.
The employment agency must engage a competent person, which shall be a full-time employee, which adequate qualifications and experience, to manage the business of the agency. The competent person must be exclusively employed by the employment agency and must be an EU/Maltese citizen residing in Malta.
Employment agencies providing temporary work services or outsourcing services must provide a bank guarantee in favour of the Employment Agencies Administration Board. The guarantee shall be that of €20,000 for agencies employing less than twenty employees. For agencies employing twenty or more employees, an additional further sum(i.e., over and above the €20K) equivalent to 2% of the total annual payroll up to a maximum of €300,000, needs to be provided as a guarantee. The bank guarantee would kick in in the case of termination of employment by the temporary agency or outsourcing agency due to the revocation/non-renewal of a licence by DIER. In such case, the terminated employees would be entitled to compensation through the Agencies Guarantee Fund.
In the case of revocation/non-renewal of the licence, DIER will publicise the details of the revocation/non-renewal and share the information with the relevant authorities(including Department of Contracts, Identity Malta and the Malta Police Force). Should an employment agency continue to operate without a licence, hefty fines would be imposed accordingly.
Any persons whom before the coming into force of these Regulations, were involved in any activity related to employment agencies which offer recruitment services, and have a valid license in place, may continue to carry out such activities under the the existing licence until it is valid. Such persons must then apply for a new licence at least two months before the expiry of the existing licence or, in the case that the existing licence expires earlier than two months from the entry into force of these Regulations, they must apply for the new licence not later than one month from the entry into force of these Regulations.
For further inquiries, you may contact Dr. Krista Ellul on krista@davidzahra.com
