Goodbye Cash: Malta’s New Law Ends Brown-Envelope Wages for Foreign Workers

**No More Cash in Hand: Malta’s New Rules for Third-Country Workers Shake Up the Labour Market**

From 1 October, the rustle of brown envelopes on building sites, in restaurant kitchens and on cleaning rotas will fall silent. A new government directive bars employers from paying third-country nationals (TCNs) in cash, forcing wages through bank transfers or cheques. The reform, slipped into July’s Budget Implementation Act, is the latest move in Malta’s long chess game against labour exploitation – and it’s already dividing opinion from Marsa markets to Mellieħa farmhouses.

For decades, Malta’s booming economy has leaned on migrants from the Philippines, Nepal, India and Bangladesh. They pick tomatoes before sunrise, plate rabbit stew in Valletta brasseries and hoist steel on high-rise towers reshaping Sliema’s skyline. Many arrived on the promise of €1,200 a month, only to watch €300 disappear into “agency fees” or “rent” deducted by employers who insisted cash was “faster for everyone”. The new rule yanks that shadow economy into the light: every euro must now be traceable, declared and, crucially, taxed.

“No more excuses,” JobsPlus director-general Josephine Bugeja told reporters at a hurried press briefing last week. “If the money hits a bank account, we can see it, the worker can prove it and the employer can’t pretend it was never paid.” Labour inspectors have been armed with handheld scanners to swipe residency cards on the spot; fines start at €2,000 per undeclared worker and climb to €10,000 plus criminal charges for repeat offenders.

Yet in a country where 27 % of the labour force is foreign-born, the change feels seismic. At the Ħamrun grocery that doubles as an unofficial Western Union counter, Nepali security guard Sujan Thapa queues to open his first Maltese bank account. “Before, boss give cash, I send home same day,” he shrugs, clutching a wad of payslips he hopes will persuade HSBC. “Now I wait three days for transfer, then another five for bank in Kathmandu. My mother needs medicine now, not next week.”

Employers are scrambling too. “I’ll have to hire an accountant just for four Bangladeshi cooks,” fumes Antoine Zammit, who runs a St Julian’s pasta joint. “Cash was easier – they wanted it, I saved on NI contributions. This is Brussels meddling by stealth.” His lament echoes across Facebook groups where some call for a boycott of “bureaucratic Malta” and others threaten to replace TCNs with EU nationals who can still legally be paid in folded notes.

But the stories that haunt the islands are darker. Last May, a 26-year-old Kenyan carer was found locked in a Swieqi garage, owed €7,000 in unpaid wages. Her employer had insisted on cash “so you don’t pay tax in Kenya”. The new rules, say NGOs, give workers a paper trail to sue. “A bank statement is a bulletproof witness,” stresses Carla Camilleri from aditus foundation. “We’ve already filed 14 court petitions using past transfer records; imagine when every case has one.”

There is cultural irony here. Malta prides itself on *kemm għandek?* – the casual Mediterranean haggle over price, often settled with a handshake and a crumpled tenner. Yet that same informality has fuelled a parallel universe where passports are confiscated, rent is deducted for bunk-bed “hot-beds” and a day off is a luxury. The reform nudges the island toward northern rigour without quite abandoning its soul. “We’re not becoming Germany,” insists Finance Minister Clyde Caruana. “We’re becoming fair.”

Early signs suggest workers themselves are cautiously optimistic. At the Ċentru Parrokjali in Marsa, Filipino parish priest Fr. Dennis packs 200 people into a hall to explain direct debits. When he asks who already has a Maltese account, half the hands shoot up – a silent revolution in a community once paid exclusively in envelopes stuffed behind the *ħobż biż-żejt* counter.

Come October, the first digital payslips will ping into phones across Malta. Some farmers warn entire tomato crops could rot; others predict wages will finally rise once employers can’t skim the top. Either way, the brown envelope era is over. In its place: a tiny bank alert that reads “*Salary received*” – three words that may finally spell dignity for the people who built modern Malta.