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Non-wage labour costs much higher than indicated

Employees have 6.5 more days of paid leave than EU average

The real non-wage labour cost for employers in Malta is far higher than the figures quoted recently, the Malta Chamber of Commerce, Enterprise and Industry has stressed.

These contributions paid on the average private sector salary - according to the NSO Labour Force survey - result in a 12.5 per cent non-wage cost, the chamber said, considerably more than the 6.7 per cent of the total cost of labour quoted.

Labour cost figures must include all factors contributing to non-wage expenses
such as the mandatory statutory bonuses paid by the employers and the contributions to the maternity leave trust fund - alongside national insurance and other costs that do not render productivity.

It pointed out that Malta’s employers also have to manage with the least productive hours in Europe, as Malta has the highest number of paid vacation days among all European Union countries. Malta has 39 paid vacation days when counting both vacation leave and public holidays, whereas the average across the European Union is 32.5 days.

"While holding in the highest regard values of social responsibility, the Chamber notes that Maltese employers, unlike their European main-land colleagues, have to contend with added costs of operating from an island, ie shipping in raw-materials and shipping-out their finished products as well as the third highest energy rates in Europe besides additional costs imposed by other market frictions that are unique to Malta.

"The Malta Chamber notes that no one owes Malta a living and investment will always be attracted towards the most favourable conditions possible," it warned.

The Chamber said that its comments were not meant to indicate a lack of social conscience but rather its conviction that the country can only ensure the economic sustainability of jobs through competitiveness.

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