The Maltese government has recently announced a new decree prohibiting employers from paying wages in cash, mandating that all salaries must be transferred through bank transactions. This policy aims to protect workers’ rights and ensure they receive their rightful earnings. However, the effective implementation of this measure faces several challenges, particularly for foreign workers in Malta.
During the announcement of this policy, the Prime Minister highlighted that an analysis of the labor market revealed many employees were not receiving their entitled wages as required. Cash payments not only increase the opacity of wage disbursement and the potential for tax evasion but also lead to unfair and non-transparent practices by some employers. Therefore, the government decided to ban cash payments to uphold the basic rights of all workers.
However, implementing this policy is not straightforward, especially for many foreign workers in Malta. Some foreigners face difficulties in opening local bank accounts, often relying on cash payments instead. In such cases, employers tend to prefer cash payments, which, while legally non-compliant, serve as a practical compromise. Many foreign workers opt for virtual banking services like Revolut, as these provide a convenient payment method. However, this option does not resolve all issues, particularly when wage payments are required to be made via bank transfer, leaving many still in a difficult position.
Why is it So Difficult to Open a Bank Account in Malta?
According to Malta-life.com, for the policy prohibiting cash wage payments to be truly effective, the Maltese government should provide foreign workers with legitimate and compliant channels to open bank accounts. For many third-country nationals working in Malta, the ability to successfully open a bank account directly impacts their quality of life and job stability. If the government can simplify the process for foreigners to open bank accounts in Malta and provide necessary support and guidance, it would not only help foreign workers receive their wages legally but also promote healthy economic development to some extent. Furthermore, ensuring that every worker has access to a bank account would enhance social transparency and reduce the risks associated with cash transactions.
While the policy to ban cash wage payments faces some challenges in implementation, it is indeed an important step towards increasing economic transparency and protecting workers’ rights in the long run. By regulating wage payment methods, the government can better monitor and manage the labor market, reducing instances of tax evasion and violations of labor rights. In an increasingly globalized society, Malta, as a significant business and tourism hub, needs to attract and retain talent from around the world. Providing a friendly and compliant financial environment will make Malta more competitive internationally.
The Maltese government’s policy to prohibit cash wage payments, while well-intentioned, relies on a deep understanding of the actual living conditions of foreign workers for its successful implementation. The government should facilitate the process for foreigners working in Malta to legally open local bank accounts rather than impose numerous obstacles. Only then can this policy be effectively executed, genuinely protecting workers’ rights and promoting healthy economic development. It is hoped that in the future, the Maltese government will listen to societal feedback and continuously improve existing policies to create a fairer and more transparent labor market.
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