Amendment proposed to resolve issues surrounding service charge payments in MVR

An amendment to the Employment Act has been proposed to address the issue of service charge payments being distributed in Maldivian Rufiyaa.

The amendment proposed to the Employment Act by Kendhoo Constituency MP Mauroof Zakir seeks to insert a new subsection following Section 52(2) of the current Act.

The Maldives Monetary Authority (MMA) initially mandated tourism service providers to exchange dollars through a set of regulations. However, this requirement was subsequently formalized into law and has since come into effect. Following these changes, several resorts have discontinued the practice of paying service charges in US dollars, opting instead to disburse these payments in Maldivian Rufiyaa.

The objective of submitting this bill is to ensure that employees in the tourism sector receive the service charge guaranteed to them by law. While current regulations mandate that service charge collected by tourism businesses must be distributed equitably among staff, the practice of converting these funds and paying them out in Maldivian Rufiyaa has necessitated legislative intervention to safeguard the employees' rightful earnings.

The bill includes a provision prohibiting employers from converting service charge proceeds into Maldivian Rufiyaa for the purpose of distribution to employees. It further stipulates that service charges must be distributed to employees in the original currency in which the payments were received.

Furthermore, it has been stated that businesses operating in the tourism industry must not discriminate when distributing service charges, even if an employee is working under a temporary contract or through a third party, provided they are directly involved in providing services to tourists.