COUNTRY

Malawi

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Currency

MK (MWK)

The Republic of Malawi is a landlocked country in the southeastern region of Africa. Malawi's official language is English. The economy of Malawi is primarily based on agriculture. The country recently has had an influx of foreign investment in the energy and mining sectors.

Written Agreements

Malawi's labor law requires that every employer provide their employees with a written statement of the particulars of employment. Specifically, employers are required to provide a written statement to the worker within one month after the worker has commenced work that includes the following:

  • The names of the employee and the employer
  • The date of commencement of the contract
  • The rate of remuneration and the method of calculating remuneration
  • The intervals at which salary is paid (wage period)
  • The nature of the work to be performed
  • The regular hours of work
  • Any provisions for the termination of the contract
  • Any disciplinary rules that apply to the employee.

Oral Agreements

Malawi's Employment Act defines an "employee" as a person who offers services under an oral or written contract, whether expressed or implied. However, the Act does not provide any additional guidelines on how oral employment contracts are regulated.

Regardless of whether the initial employment contract was oral, the labor law requires that every employer provide each employee with a written statement of the particulars of employment.

Implied Agreements

While Malawi's Employment Act appears to recognize the existence of implied contracts (by defining an "employee" as "a person who offers their services under an oral or written contract of employment, whether express or implied"), it provides no guidance on how implied contracts are regulated.

Malawi's Employment Act stipulates that an employee's regular working hours be set out in the employment contract, provided that no employers require or permit any employee (other than certain specifically exempted employees, such as security guards) to work for more than 48 hours during any week, excluding overtime.

An employer may not require or permit an employee to work for more than 6 consecutive days without a rest period of at least 24 consecutive hours, which must be taken on a customary rest day or a day agreed upon between the parties.

January 1 (New Year’s Day); January 15 (John Chilembwe Day); March 3 (Martyr’s day); March or April (Good Friday), Easter Monday; May 1 (Labor Day) May 14 (Kamuzu Day); July 6 (Independence Day); 15 October (Mother’s Day); December 25 (Christmas Day); December 26 (Boxing Day).

Malawi's Employment Act entitles every employee (unless specifically exempted) to a period of annual leave with pay of not less than:

  • 18 working days if the employee works 6 days a week
  • 15 working days if the employee works 5 days a week.

The annual leave is to be taken within 6 months of the date the employee becomes entitled to it. However, the leave may be deferred and accumulated by mutual agreement.

Malawi's labor law stipulates that, after completing 12 months of continuous service, an employee is entitled to at least four weeks' sick leave on full pay and 8 weeks' sick leave on half pay each year. During sick leave, an employee is to be paid the regular wage rate.

An employer cannot terminate an employee's service during their temporary absence from work because of sickness or injury.

Every 3 years, a female employee in Malawi is entitled to at least 8 weeks of fully paid maternity leave provided by the employer. In the event of illness certified by a registered medical practitioner that arises out of pregnancy or confinement and affects the employee or her child, the employer must provide additional paid leave if the registered medical practitioner recommends it.

Pregnant employees are entitled to reduced working hours or a more flexible schedule. Upon recommendation by a registered practitioner, pregnant shift workers can change to a shift that is better for their health and pregnancy.

If a female employee applies for maternity leave again before the 3-year period expires, the period of absence will be treated as unpaid leave or annual leave if it has not already been taken.

When an employee is on maternity leave, her regular benefits and entitlements, including her contractual rights and seniority accumulation, shall continue uninterrupted. Her period of employment shall not be considered to have been interrupted, reduced, or broken.

Malawi's Employment (Amendment) Act of 2021 grants employees 2 weeks' paid paternity leave every 3 years.

Minimum Wage

The minimum wage for employees in micro-sized or small-sized enterprises in Malawi is MWK 2,884.62 (Malawian kwachas) per day or MWK 75,000 per month. The Ministry of Labour also provides minimum wage amounts for other categories of workers, such as domestic workers and cargo truck drivers.

Wages are paid in accordance with the terms of the employment contract, provided that employees whose wages are fixed by the hour, day, or week are paid at least once a week or fortnight, and those with monthly- or yearly-fixed wages at least once a month.

Overtime, Holiday & Vacation Pay

For each overtime hour, an employee must be provided with compensatory rest (of at least equivalent hours) and premium overtime pay. Overtime is allowed only in exceptional cases.

There are three categories of overtime known respectively as:

  • Ordinary overtime, which is time worked on a working day in excess of the hours usually worked by the employee
  • Day off overtime, which is time worked by an employee on a day during which they would otherwise be off duty, and
  • Holiday overtime, which is time worked on a public holiday.

For each hour of regular overtime, an employee shall be paid at the hourly rate of not less than 150% of their regular wage. For each hour of day-off overtime, an employee shall be paid at an hourly rate of not less than 200% of their regular wage. For each hour of holiday overtime, an employee shall be paid at a rate of not less than 200% of the regular hourly rate.

Employees are entitled to their regular pay during annual leave. Workers are entitled to be paid 200% of the regular hourly wage rate for working on a weekly rest day or public holiday.

Notice Period

According to Malawi's Employment Act, the minimum notice period in respect of fixed-term contracts is 14 calendar days. An indefinite term contract may be terminated by either party after a written notice is provided.

The length of the notice period for an indefinite term contract depends on the wage period. For example, the required notice period is one month for workers who get paid monthly.

Either party can waive its right to notice and can also accept payment in place of notice. Instead of providing notice of termination, an employer can pay an employee a sum equal to the compensation they would have received during the notice period and confer on the employee all other benefits due to them up to the required notice period's expiration.

Severance Benefits

Malawi's Employment Act stipulates that severance pay is only due to employees dismissed for economic reasons (termination of a contract due to redundancy, retrenchment, economic difficulties, or the employer's technical, structural, or operational requirements) or employees who are dismissed unfairly. An employee must have completed one year of service to be entitled to severance pay.

Severance pay is not provided under the following circumstances:

  • After a termination that occurred during an employee's probationary period
  • After dismissal on objective grounds
  • After the dissolution of the employer (in cases of partnership) and unreasonable refusal to accept another job offer on similar terms
  • After the death of the employer and unreasonable refusal to accept another job offer on similar terms.

The amount of severance pay starts at two weeks' wages for one completed year of service and increases at certain length of service intervals.

Pension

In Malawi, the retirement age ranges between 50 (minimum) to 70 (maximum) years. At least 20 years of continuous service and contributions are required to qualify for the old-age pension. Employers must ensure that their employees are part of the mandatory National Pension Scheme.

Pension benefits are paid as an annuity and depend on the amount in the pension fund. Retired employees may also choose to receive a maximum lump sum of 50% of the pension fund amount, depending on their age.

Employees must contribute at least 5% of their pensionable salary to the National Pension Scheme, while employers must contribute a minimum of 10% of the employee's gross monthly payroll.

Dependents/Survivors Benefits

According to Malawi's Pension Act, an employee entitled to a pension can nominate family members (a spouse, child, or close relatives) and stipulate the benefit amount that will be shared between them after the employee's death. Benefits may be paid as a lump sum or annuity.

In case of death caused by work accidents or occupational diseases, employers must pay benefits to the survivors as a lump sum of 42 months of the deceased worker's last monthly earnings (minus any disability benefit paid before the date of death). If there are no surviving dependents, the employer will bear any medical attendance and funeral expenses.

Employees are required to pay at least 5% of their pensionable salary to the National Pension Scheme, while employers must contribute a minimum of 10% of the employee's pensionable emoluments.

Invalidity Benefits

In Malawi, employees can retire after being declared totally and permanently disabled by a medical doctor. The benefits can be paid in the form of a lump sum, scheduled payments, or used to purchase an annuity with the individual's pension fund's balance amount. Employers must also register their employees for a life insurance policy with a licensed insurance company. This requirement is satisfied if the employer enrolls the employee in a policy with the minimum coverage.

In case of disability caused by work accidents or occupational diseases, employees are eligible to receive benefits as follows:

  • For a total and permanent disability, a lump sum of 54 months of the employee's average monthly earnings is paid. Additional compensation is provided if the employee requires constant attendance.
  • For partial permanent disability, the benefit is calculated as a percentage of the benefit for total permanent disability proportional to the degree of disability.
  • For temporary disability, the benefit is paid from the fourth day as a percentage of the employee's earnings until recovery or certification of permanent disability.

Employees must contribute at least 5% of their pensionable salary to the National Pension Scheme, while employers must contribute a minimum of 10% of the employee's gross monthly payroll.

  • Local Laws & Regulations

    We understand that local laws and regulations change and sourcing an accurate reference guide is not easy. Our data is researched and verified by our team of local international Employment Attorneys, HR and Benefit Professionals and Tax Accountants through our Atlas team and consultants, to ensure information up-to-date and accurate.

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