Mandatory dollar conversion sparks massive losses for resort employees
TEAM has expressed concern about the changes to the Foreign Exchange Act
Tourists at the Velana International Airport (VIA)
With the implementation of the new law mandating U.S. dollar-earning businesses to convert USD payments, resort employees have begun receiving their salaries and service charges in Maldivian Rufiyaa, causing a significant reduction in their income.
According to the Tourism Employees Association of Maldives (TEAM), employees who were previously receiving salaries in USD will see a reduction in their monthly income ranging from MVR 3,000 to MVR 5,000 when paid in MVR.
TEAM noted that this will further increase the financial burden on employees due to rising commodity prices and living costs.
In addition to this, TEAM has highlighted the challenges faced by foreign workers, who make up approximately 70 percent of the tourism sector workforce. Many of these employees rely on income in USD and send money to their families abroad, and the requirement to convert currency has created additional difficulties for them.
Given these circumstances, TEAM has expressed concern about the changes to the Foreign Exchange Act, which have resulted in resort employees' salaries and service charges being converted from USD to MVR.
Under the amendments to the law, which came into effect this January, businesses earning foreign currency, including resorts, are required to convert either USD 500 per tourist or 20 percent of their revenue to MVR.
As a result, some resorts have begun paying salaries and service charges in MVR instead of USD.
Citing the financial difficulties faced by employees due to these changes, TEAM has called on the government to take immediate action.
TEAM has also called on the government to halt the conversion of salaries and service charges to MVR. Further, TEAM has emphasized the significance of maintaining the original terms included in employment agreements. They stated that changing the initially agreed-upon salary terms undermines the financial security of employees working in the tourism sector.
In response to the concerns raised by TEAM, it has been reported that the government has not yet made any statement, nor has it clarified any issues regarding the potential impact on the income of employees working in the tourism sector due to the changes in the foreign currency law.
