Table of Contents

Malawi

Table of Contents

Currency

Malawian Kwacha (MWK)

Payroll Frequency

Weekly or Monthly

Employer Taxes

10%

About Malawi

Malawi, formerly Nyasaland, is a landlocked African nation with an estimated population of approximately 18 million primarily rural people with its capital in Lilongwe. After colonization by the British, it became an independent country in the 1960s. As one of the world’s least developed countries, Malawi’s economy is dependent on agriculture and the country’s government relies heavily on foreign aid to meet its development needs, especially in the areas of HIV/AIDS and maternal and infant mortality. Malawi’s ethnic groups include Chewa, Lomwe, Yao, Ngoni, Tumbuka, Sena, Mang’anja, Tonga, Nyanja, and Nkhonde. The official language is English with Chichewa commonly spoken with Christianity and Islam being the major religions practiced.

Employment Relationship

• Permanent Employment

According to Malawi’s Employment Act, contracts for positions connected with the regular and permanent activity of an organization are deemed to be contracts of employment for an unspecified period (indefinite term). Either party may terminate an employment agreement for an indefinite term upon giving the other party the minimum period of notice in writing. In cases of ambiguity, where an employee is regularly and repeatedly employed and paid wages based on completion of a quantity of work that can be completed in less than 24 hours, the contract of employment is deemed to be for an unspecified period.

• Fixed-Term or Specific-Purpose Contracts

Although Malawi's Employment Act stipulates that a contract may be concluded for a specified period or specific task, it does not contain provisions that mention the reasons for which such agreements may be made. The Employment Act specifies that a contract of employment for a specific period or specific task is automatically terminated on its end date or upon the completion of task unless it is expressly or tacitly renewed or prolonged. No notice is required for the termination of such a contract. If notice is required in the contract, minimum duration is 14 days. The Employment Act also does not specify the maximum length of a single fixed-term contract nor the maximum number of renewals allowed for a single fixed-term contract. However, fixed-term or task-based contracts used to fill positions connected with an employer's regular and permanent activity are deemed to be contracts for an unspecified period (indefinite term).

• Temporary Employment Contratcs

Malawi's labor law does not provide any specific guidance on temporary employment contracts. The Employment Act stipulates that a contract of employment to perform a specific task ends upon its completion, and no notice of termination is required of either party.

Probationary Period

Malawi's Employment Act allows the use of a probationary period in an employment contract with a skilled worker, which the Employment Act defines as "an employee in an undertaking who has [a] special ability to do something for which ability is gained through acquisition, programmed or otherwise, of knowledge, attitude, and behavior." The parties may agree on the duration of the probationary period, provided that the period does not, in any event, exceed 12 months. During a probationary period, the employment contract may be terminated at any time by either party without notice.

Working Hours

Malawi's Employment Act stipulates that an employee's regular working hours be set out in the employment contract, provided that no employer 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 six 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.

Holidays / PTO

• Statutory Holidays

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).

• Paid Annual Leave

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 six days a week 15 working days if the employee works five days a week. The annual leave is to be taken within six months of the date the employee becomes entitled to it. However, the leave may be deferred and accumulated by mutual agreement.

• Sick Leave

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 eight 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.

• Maternity Leave

Every three years, a female employee in Malawi is entitled to at least eight 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 as the employer may deem fit. 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. Where 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 not already 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.

• Paternity Leave

Malawi's Employment (Amendment) Act of 2021 grants two weeks' paid paternity leave to employees once every three years.

Termination of Employment

• 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.