A minimum wage is to be announced on Monday.

Speaking to RaajjeMV, Minister of Economic Development Fayyaz Ismail revealed that the allocation of a minimum wage will bring about positive changes and progress to the country’s economy. As such, positive impacts are also expected to be brought for workers and businesses alike.

The minister remains hopeful that the entire structure of the economy will see positive progress with the allocation of a minimum wage.

The government decided to allocate a minimum wage with an aim to lessen the differences in working hours for those employed in both the public and private sectors. Minister of Finance Ibrahim Ameer has since revealed that MVR 500 million has been allocated in the state budget for 2022, for this purpose.

Presenting the proposed state budget 2022 at the People’s Majlis, Minister Ameer revealed that one of the biggest initiatives of the government that has been prioritized include ensuring a rightful wage for workers, and ensuring equality in allocating wages.

A minimum wage is to be allocated and implemented from 2022 onwards.

To cater to the aim of lessening the differences in working hours for those employed in both the public and private sectors in similar posts, a new pay framework is to be established to be implemented from next year on, in “harmonization” phases.

The amount to be paid as minimum wage for employees, was finalized by the Minimum Wage Board on October 5 and forwarded to the minister. As such, the minimum wage allocated for small enterprises in the private sector, is MVR 24.04 per hour which amounts to MVR 5,000 per month. Those employed at medium-sized enterprises in the private sector will be entitled MVR 33.65 per hour amounting to MVR 7,000 per month and MVR 42.79 per hour amounting to MVR 8,900 per month, for those employed in bigger companies.

The minimum wage for permanent public sector workers who spend up to six hours at work, is set at MVR 7,000. Those working in the public sector for less than six hours per day, will be entitled to MVR 33.65 per hour.

The ministry is reviewing the recommended minimum wage, under the legal mandate.

The Employment Act mandates the economic minister to decide on a minimum wage by the end of 2021. The imposition of a minimum wage was one of the many amendments brought by the People's Majlis to the Employment Act. The act ensures that the minister must decide on the minimum wage and that employers must give the minimum wage to their employees by the end of 2021, focusing specifically on nine sectors.

The industries that were focused on are the agriculture and fisheries industry, the tourism industry, the construction industry, the transport industry, the health sector, the education sector, small and medium enterprises sector, communication and information technology sector and the maritime shipping industry.

A board of 11 members was formed to advise the minister regarding the allocation of a minimum wage. Before the amendment was brought, the government proposed a minimum wage between MVR 4,000 and MVR 8,000, which was followed by major discussions. The minimum wage board recommended the basic salary to be MVR 6,400, with civil servants and those in tourism industry to get a minimum wage between MVR 6,400 and MVR 8,600.