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Indefinite postponement of minimum wage for expats

Mohamed Rehan
21 September 2022, MVT 21:51
Expatriate workers--
Mohamed Rehan
21 September 2022, MVT 21:51

Maldives government proposed to postpone minimum wage for expatriates indefinitely in light of global economic crisis affecting the island nation's economy. This postponement was endorsed by Maldives parliament on Wednesday, September 21.

President Ibrahim Mohamed Solih ratified the bill legalizing this indefinite postponement.

Moreover, President's Office on Wednesday confirmed the presidential ratification on the amendment of Employment Act.

Earlier, minimum wage was legally enforced for local workers.

The bill earlier proposed postponing minimum wage for expatriates for the following two year period. However, in light of the current global economic circumstances, minimum wage for expats have been postponed without an exact date of due.

The parliament's Social Committee's report on the bill passed with 49 votes against one.

The bill identifies current economic conditions globally had an adverse impact on the Maldivian economy, making it untimely for the government to implement the minimum wage practice.

According to the bill, the Minister of Economic Development on the recommendation of Minimum Wage Advisory Board must declare the date of implementation after reviewing the economic conditions of the island nation, productivity and welfare of the country.

Government earlier announced a minimum wage of MVR4,500 per month on small tier private companies, MVR7,000 per month on medium-tier private companies, and MVR8,000 on larger private companies. Civil servants and employees of state-owned enterprises (SOEs) are subject to MVR7,000 per month as minimum wage.

Minimum wage was legally enforced after Maldives Employment Act was amended in 2020. Under the said amendment, government must assign national framework of minimum wage, which came to fruition in January 2021.

Following parliament's decision to postpone minimum wage for expatriates, Transparency Maldives expressed concern, which believed this decision will impact a large portion of the country's workforce which included foreigners. The organization also shared their fear of potential unemployment rate surge.