Malawi PEO & Employer of Record Services
Global PEO Services (GPS) helps companies hire employees in Malawi without establishing a legal entity. All human resources, benefits, payroll, and tax needs for the employees are managed by the Global PEO, while the new hires and headquarter teams focus on your business goals.
When hiring employees in Malawi, establishing a subsidiary or branch office is not always the best route, as it’s often a lengthy and expensive process. Hiring via a Professional Employer Organization (PEO), or Employer of Record (EOR), is a faster and often more effective option – especially when starting up in a new country.
Global PEO Services hires the employees on your behalf, legally contracting them through our subsidiary in accordance with Malawi labor laws. As a result, the burden of compliance is on us and the employees can begin work for your company in a matter of days. PEOs/EORs provide you with a streamlined option for hiring employees, testing markets, and responding to growing business needs in Malawi. With Global PEO Services, you get control without taking on legal entity liabilities, contractor risks, or sacrificing on talent or speed to market.
Malawi - Country Overview
With a 5-year compound annual growth of 3.6%, Malawi has witnessed sustainable growth and continues its stride toward economic consolidation. Trade is crucial to Malawi’s economy. The combined value of exports and imports equals 65% of GDP. Major exports include sugar, tobacco, tea, groundnuts, pulses, ceramics, gemstones, beans, and enamelware.
English, Chichewa, Chinyanja
Blantyre, Mzuzu, Zomba, Kasungu
Employment Contracts in Malawi
The following types of employment contracts are prevalent in Malawi:
- For an unspecified period
- For a specified period
- For a specific task
The parties can agree on the duration of a probationary period which should not exceed 12 months. During the probation period, the employment contract can be terminated by either party without giving any notice.
Working Hours in Malawi
Regular working hours are mentioned in employment contracts, but employers cannot ask employees to work for more than 48 hours (excluding overtime) or 6 consecutive days in a week. Employees are entitled to a minimum rest period of 24 hours that can be taken on a regular rest day or a day agreed by both the parties.
Work done beyond 48 hours in a week is treated as overtime. There are 3 broad categories of overtime:
- Ordinary Overtime: Work done beyond regular working hours is considered ordinary overtime and is paid at 1.5 times the regular pay.
- Day Off Overtime: Work done on off days is considered day off overtime and is paid twice the regular pay.
- Holiday Overtime: Work done on holidays is considered holiday overtime and is paid twice the regular pay.
Employee Leave in Malawi
- New Year
- John Chilembwe Day
- Martyrs’ Day
- Good Friday
- Easter Monday
- May Day
- Kamuzu Day
- Freedom Day
- Eid al-Fitr
- Independence Day
- Christmas Day
Employees who work 6 days a week are entitled to 18 days’ annual leave while those who work 5 days a week are entitled to 15 days’ annual leave. The annual leave can be deferred and accrued based on mutual agreement.
Employees are entitled to a minimum 4 weeks’ sick leave (on full pay) and minimum 8 weeks’ sick leave (on half pay) annually. Employers can ask employees to produce a medical certificate issued by a registered medical practitioner which states employees’ sickness or incapacity.
Women employees are entitled to a minimum 8 weeks’ maternity leave. During the maternity leave, employees’ benefits, entitlements, contractual rights, seniority, employment period continue uninterrupted.
Employee Benefits in Malawi
National Pension System
Under the Pension Act 2010, all the employees are required to register with the National Pension Scheme unless exempted by the Minister of Finance.
Under the new pension system:
- Employers must enroll employees with salaries more than MWK10,000 per month within 12 months of employment.
- Employers are required to make contributions equal to 10% of employees’ salary while employees make contribution equal to 5% of their salary.
- Employees are entitled to life insurance benefit equal to their annual salary.
- Employees qualify for retirement benefits after 20 years of contributions or after attaining the age 50, whichever is earlier.
Currently, contributions can be made to one of the following privately managed funds:
- Restricted Funds: Pension funds which are restricted to an employer or a group of employers
- Unrestricted Funds: Funds which are open to public
- Umbrella Funds: Funds that are restricted to particular funds’ trustees and are mainly used to pool investments
The Pension Act 2010 contains details such as pension rights, qualifying conditions, and contribution rates but the information available is limited. The legal retirement age varies from 50 to 70 years.
Dependents’ / Survivors’ Benefit
Employees can nominate family members for survivor benefits after their death.