Temping agencies warn government’s Labour Migration Policy could stifle economic growth

The Association for Temping and Outsourcing Agencies (AFTA) has issued its response to Malta’s new Labour Migration Policy, revealed earlier this month, commending the government’s achievements in fostering economic growth but cautioning against certain measures that may hinder business operations and economic progress.

AFTA highlighted the critical need for tailored and balanced approaches to support Malta’s evolving labour market needs.

Key elements of government’s new Labour Migration Policy:

• Employers found to have high termination rates will be blocked from employing new foreign workers
• Permit fees to rise and fall based on retention ratios
• TCNs who lose their job to get 60-day grace period
• Cash salaries are to no longer be permitted, with payments made via bank transfer
• Foreign workers will need to take a course on Maltese culture before coming to Malta

Key recommendations and reactions

1. Opposition to workforce application limits

AFTA strongly opposes Recommendation 18, which proposes capping the recruitment of third-country nationals (TCNs) based on an organisation’s existing workforce size. The association argued this would stifle growth, limit competitiveness, and disproportionately affect sectors heavily reliant on TCNs. Instead, AFTA advocates for flexibility to allow businesses to scale operations in response to market demands.

2. Concerns over turnover rate restrictions

While AFTA agrees with the principle of promoting employee retention, it critiqued the proposed minimum termination rates for TCN applications, warning that such measures could inadvertently penalise firms for natural turnover resulting from upskilling and workforce mobility. The association urged regulators to adopt indicative guidelines rather than rigid thresholds and to account for legitimate turnover reasons.

3. Call for transparency and fairness

Throughout its recommendations, AFTA stressed the importance of transparent processes, particularly in areas such as termination rate definitions, suitability checks, and the establishment of a high-risk country list for employment applications. Clear criteria and consistent enforcement were emphasised to build stakeholder confidence in the policy.

4. Support for positive measures

AFTA supported several proposals, including longer renewal periods for TCN permits, initiatives to upskill foreign workers, and the introduction of integration programmes. It also endorsed the reduction of permit fees for essential roles in health and elderly care, and measures to streamline applications for exemplary employers.

Broader recommendations

AFTA also proposed additional measures, including the introduction of a work-only visa for TCNs during their first year in Malta to discourage misuse of the migration system and recommended that employers be able to report instances of abandonment to ensure unresolved obligations are addressed. The association also called for robust economic and social impact assessments before the implementation of the policy to avoid unintended consequences.

While AFTA acknowledged the policy’s intention to create a more accountable migration framework, it criticised the “one-size-fits-all” approach, warning that rigid measures risk creating inefficiencies and hindering flexibility in the labour market. The association called for a collaborative, evidence-based approach to refine the policy into a framework that balances the needs of businesses, workers, and society.

Read the full policy document: