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Advisory Board proposes MVR 6,400 as minimum wage

Shahudha Mohamed
20 February 2020, MVT 22:41
Minister Of Economic and Trade Fayyaz Ismail. PHOTO: MIHAARU
Shahudha Mohamed
20 February 2020, MVT 22:41

Minimum Wage Advisory Board, on Thursday, advised the Minister of Economic Affairs Fayyaz Ismail to set the minimum wage at MVR 6,400.

Speaking to local media Mihaaru, Fayyaz stated that the minimum wage was set according to criteria decided by the board, adding that the suggestion had been forwarded to the Parliament for counsel.

According to the minister, it is important to determine whether the employers are capable to pay the minimum wage to their workers.

The minister further stated that the International Labour Organisation (ILO) advised Maldives to settle for a minimum wage between MVR 6,000 and MVR 6,500.

"This may not be the best amount, but it should also be an amount that can be payable by the employers", Fayyaz admitted.

He further expressed concern that small businesses may not be able to keep up with the minimum wage, noting that it may not be feasible to pay a monthly salary of MVR 6,400 to every employee working at a small shop in an island.

Moreover, Fayyaz stated that forcing an unrealistic minimum wage may drive businesses to bankruptcy, leading to reductions in number of job positions.

Addressing public concern over the minimum wage being too low, Fayyaz stated that the general population were mixing up minimum wage and living wage.

According to Fayyaz, no country in the world demands the minimum wage to fulfil all of the monthly expenses.

"The idea of minimum wage, since the beginning, is to provide enough for someone to be fed"

Fayyaz urged the public to accept the minimum wage decided by the state as it can be tweaked every two years after a review. This review can be conducted earlier in case of an economic emergency.

Establishing a minimum wage was amongst President Ibrahim Mohamed Solih's electoral pledges. Economic Minister had formerly noted that the minimum wage will be decided and announced by the end of February.

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