Introduction

Expanding or managing teams across Malta and the United States presents an interesting challenge for HR leaders. Though both are established economies, their employment systems couldn’t be more different. Understanding these differences is not just a matter of compliance - it’s about building trust with your people and avoiding costly missteps. According to OECD data, misclassification and contract disputes remain among the top three legal issues for global employers operating in the US, while the European Foundation for the Improvement of Living and Working Conditions highlights rising scrutiny over fixed-term and gig contracts across the EU, Malta included.

If you're scaling into either of these jurisdictions - or managing teams across both - here’s what to keep in mind.

Quick Tips

• US employment is largely “at-will” unless explicitly agreed otherwise - Maltese law requires just cause for terminations.

• In Malta, probationary periods are capped at six months by law - longer periods are not enforceable.

• The US does not guarantee paid annual leave federally - Malta mandates 24 days plus public holidays.

• Malta follows strict data protection under GDPR - the US has no federal equivalent.

• Always work with local HR or legal experts before issuing offers or contracts in either country.

Termination Rights: Stability vs Flexibility

Malta’s Employment and Industrial Relations Act (EIRA) provides strong protection against unfair dismissal. Employers must provide justification for termination, follow set notice periods, and in many cases, conduct a consultation process. This aligns with much of the European employment model.

In contrast, the US operates under the “employment-at-will” doctrine. This means an employer can terminate an employee at any time for any legal reason - or no reason at all - unless constrained by a contract or collective agreement. However, this flexibility comes at a cost. The lack of clarity often leads to costly disputes, especially when inconsistent practices or perceived bias are involved.

From my work with a US client navigating redundancies across three states, we found that while legal obligations were lighter than in Europe, the reputational and employee relations risks were far greater. Transparent comms and robust internal documentation became our best tools.

Paid Leave and Working Time

Paid leave is a clear differentiator. Maltese employees are entitled to 24 days of paid annual leave plus 14 public holidays. The US has no statutory requirement for paid holiday at federal level, though most employers offer it as a benefit.

Similarly, working time regulations in Malta are influenced by EU directives, with a cap of 48 hours per week and requirements around rest breaks and overtime pay. In the US, the Fair Labor Standards Act (FLSA) governs hours and overtime, but enforcement and entitlements vary by state and industry.

For one European-based client managing their first hire in New York, we developed a benefits package that met local norms while staying in line with the company’s global policies. It wasn’t about matching Malta's entitlements exactly - it was about being competitive, fair, and aware of legal limits.

Contracts and Classification: Get it Right from Day One

In Malta, written contracts are required for most employment and must detail essential terms including job description, salary, probation, leave entitlements, and termination clauses. The law is clear: anything not in writing will be presumed in favour of the employee.

In the US, written contracts are not required for most roles. However, that doesn’t mean employers should skip them. Without documented terms, it becomes harder to enforce expectations or defend against disputes.

Another common issue is misclassification. The IRS and Department of Labor in the US regularly investigate whether individuals labelled as “independent contractors” should be treated as employees. In Malta, the distinction is also regulated, with specific criteria around subordination, tools of trade, and economic dependence.

I once worked with a US-based startup engaging developers in Malta. They initially contracted them without registering locally. We quickly helped them course-correct - drafting local contracts, arranging for payroll registration, and briefing their managers on cultural and legal expectations. The team appreciated the clarity, and compliance risks were neutralised.

Final Thoughts

Employment law is not just a legal box to tick - it shapes the entire employee experience. Malta and the US offer different models, each with benefits and drawbacks. For international employers, the key is not to import one system into another. Instead, meet each jurisdiction on its terms.

What’s next for your global people strategy?

Book a free compliance check-in or HR audit with ThinkGlobal HR. Whether you're hiring your first employee in Malta, managing exits in the US, or trying to align your global policies without breaking the rules, we’re here to help - with practical insight, trusted local knowledge, and a human approach that puts people first.