(Adds MEA's reaction)
Minimum wage earners are set to receive a top-up on their monthly pay from the government as part of a strategy to 'make work pay' and stimulate the jobless to find employment.
The top-up amount is yet to be determined, but an Education Ministry spokesman said it could be in the region of €1,500 a year.
On the other hand, those refusing employment opportunities or insisting on 'non-existent' vacancies will no longer receive unemployment benefits, the government said.
These measures were announced this morning during the launch of a National Employment Policy by Prime Minister Joseph Muscat.
Another innovative measure is an increase in the social security contribution paid by employers for each of their workers.
In return government will be funding the entire cost of maternity leave, even in the private sector.
The aim is to have a level playing field and to distribute the cost of this measure among a bigger pool of employers. The increase in the social security contribution will be determined win consultation with the employers.
Dr Muscat said that this measure was intended to make it easier for women to avail themselves of maternity leave.
In his address Prime Minister Joseph Muscat said that the employment policy has not been updated for 10 years.
He added that the measures had the backing of all social partners and emphasised government's resolve to implement them all. However, he said there will be no 'big bang' approach and measures would be introduced gradually.
Dr Muscat said education and training were the best tools for job creation. In the first year of the Labour government, nine job opportunities were created for every single unemployed person, which was double the amount of 2012.
The Prime Minister said the employment policy was based on 10 major proposals.
He said that the tapering of unemployment benefits introduced this year for those finding a job would be extended beyond the third year.
However, it made no sense to have some 300 people seeking jobs like petrol pump attendants and measures had to be taken to train these people for other kinds of jobs.
MEA praises document but raises three concerns
In a reaction, the Malta Employers’ Association said the document provided a professional analysis of labour market issues in Malta, with concrete actions to address labour market deficiencies.
Although it contained many tangible measures which were the result of consultations at the Jobs Plus committee and the MCESD with the involvement of the social partners, there were three issues of concern to the association.
The proposal concerning payment for maternity leave by government which would be offset by an increase in employers’ national insurance contributions was a last minute addition and needed further consultation with employers.
Moreover, in spite of benefits to employers in terms of subsidised labour costs, the association still has reservations about the impact of tapered benefits for those who have been unemployed for more than two years on the labour market.
“Unless accompanied by strict enforcement, this could be potentially abused by having unemployed stretch their stay on the unemployment register to qualify for the benefits once they find employment.”
The MEA said the document also failed to address issue matter of employment levels in the public sector.
In its memorandum, which was presented to political parties prior to the last elections, the association had stressed the need for a more rationalised public sector.
But in the past 13 months, employment in the public sector increased by 1,400 people. The association expressed concern that one reason for the manpower shortage, particularly in low-skilled jobs, was the preference that many people on the unemployment register had for jobs in the public sector.
The MEA said that overall the document contained a number of positive points which could stimulate a higher participation rate to reach the EU target of 70 per cent by 2020.