Malawi is landlocked in southeastern Africa, accommodating a population of about 20.4 million. Its capital city is Lilongwe. Malawi’s economy is predominately dependent on agriculture. However, other industries, such as manufacturing, logistics, tourism, financial and professional services, real estate, and mining, contribute significantly. Employers can easily find top skills from such industries.

Are you an international employer who wants to hire remote workers in Malawi? This post is a simple guide on how to go about it legally. It also answers some frequently asked questions related to hiring remote employees.

How to Hire Remote Employees or Contractors in Malawi

Like many other countries, hiring and employment laws can be complicated for international employers, especially when working with remote employees or independent contractors. Let’s briefly explore the legal requirements employers must get before diving into two main ways of hiring remote workers in Malawi.

First, employers can successfully hire talents in Malawi as either employees or contractors. Notably, employees in Malawi are entitled to a minimum wage of Malawian Kwacha (MWK) 50 000 per month and 48 hours of work per week.

Employers are subject to a 10% tax. Employers should also issue a 1 to 30 days notice if they terminate an employment contract. In addition, the probation period may last up to 12 months.

Above all, a written work contract is mandatory for formal jobs. Malawi’s employment act advocates for an excellent employer-employee relationship that includes equal pay, anti-discrimination, the prohibition against child labor and forced labor, and remedies for infringement of fundamental rights.

Below are two ways an employer can hire remote workers in Malawi:

1. Set up a subsidiary in Malawi

The first option is to hire remote workers in Malawi id by establishing a physical presence through a local entity where the mother company takes ownership. This kind of entity is also called a daughter company. However, in this case, a subsidiary must operate according to Malawian laws.

Establishing a local entity is often only suitable for some employers due to the extended onboarding period, high cost, and complex registration processes. They may consider other options to hire talents from Malawi.

However, a subsidiary is a good fit if a company plans to build a brand and expand business in that country.

2. Hire using an Employer of Records (EOR)

An Employer of Records service provider, like Workpay, is a company that engages and pays employees to provide services to another company. They enable companies or employers to work with employees in another country without establishing a local entity.

EORs hire on behalf of a company and comply with local tax regulations and labor laws. They even go further and handle the payroll processes on behalf of a company. For instance, a Chinese or South African company can partner with Workpay to hire remote workers in Malawi.

Usually, companies or employers with EOR services provide access to a large talent pool and rarely worry about compliance while hiring.

Are Remote Workers “Employees” or “Contractors”?

It’s easy to confuse employees and contractors while hiring remotely, which could lead to employee misclassification. What is the difference between a remote employee and an independent contractor? Below are the key differences between independent contractors and remote employees:

1. A remote employee works strictly under the supervision and control of an employer. At the same time, an independent contractor is self-employed, sets their rates, and controls how the work occurs to provide services or goods to another party.

2. Independent contractors pay their income taxes at the end of the contract, while employers take responsibility for their remote employees’ taxes.  

3. Employees receive hourly or salary pay, while independent contractors are paid according to the contract agreement.

4. The relationship between an independent contractor and the client is often short-term, while that of an employer and employee is continuing. 

Note: Independent contractors are also called freelancers or contract workers.

Is there any risk for misclassification (an employer treating an employee as a contractor or vice versa) while hiring? Yes, there are risks, and it’s one of the greatest, especially when working with remote workers. Misclassification can easily lead a business to face the following risks: legal fines (due to lawsuits from workers or third parties), back taxes, fines, and penalties.

Any effective solution to misclassification risk? Among the best ways employers can get employee classification right from the start is by regularly reviewing human resource strategy and workers’ status. Above all, they may consider working with an EOR who, in such a situation, takes compliance and tax obligations for a business’s employees.

Where Can I Find Remote Employees?

With the current technological advancement, it’s much easier than before to find remote workers on multiple platforms using different ways. Here is where employers can find potential remote employees:

1. Via social media

Social media platforms allow employers to identify and connect with remote employees globally. Nowadays, it has become easy to start meaningful conversations with other users on social media platforms like Facebook, Instagram, Twitter, LinkedIn, and Reddit. They give you access to hundreds of active users who can be great hires.

2. Via job boards

Job boards are a great channel when employers want to put out a job opening to interested remote workers. All it takes is creating a job post on a reputable job board. Among the top job boards to find remote employees are ZipRecruiter, Glassdoor, Indeed, Flexjobs, CareerBuilder, AngelList, SimplyHired, etc.

Employers can easily find professionals across all industries via job boards.  

3. Via work marketplace

Employers can also easily find skilled remote employees and independent contractors via work marketplaces such as UpWork, PeoplePerHour, Fiverr, Toptal, etc. Employers have access to top talents globally.

4. Via blogs and websites

Most professionals, especially independent contractors or freelancers, have blogs or websites outlining their projects' portfolios, services they offer, charge rates, and contacts. Therefore, it becomes easier for employers to reach out to a person they can hire as a remote worker.

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