Seventh Amendment to Employment Act

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The Seventh Amendment to the Employment Act (the “Seventh Amendment”)1, gazetted on 21 September 2022, removed the obligation on employers to pay minimum wage to expatriate employees in accordance with the Minimum Wage Order until a compliance date is announced by the Minister of Economic Development (the “Minister”).

Establishment of the minimum wage

The Sixth Amendment to the Employment Act2 provided a comprehensive guideline on the establishment of the minimum wage to be given to employees working in Maldives. Notably:

    1. A Minimum Wage Advisory Board was formed as per the Sixth Amendment  to advise the Minister on the minimum wage to be given to employees with considerations to different business sectors. .
    2. Within 30 days of receipt of the advice of the Minimum Wage Board, the Minister is required to issue an order, determining the minimum wage.
    3. The current minimum wage to employees working in Maldives was established pursuant to the Minimum Wage Order published on 8 November 2021 (the “Order”) by the Minister marking the first time such a determination has been made in Maldives.

Change in law with the Amendment

  1. Although the Order did not include minimum wage determined for  expatriate employees working in Maldives, section 62(g) of the Employment Act3 obligated the employers with expatriate employees to comply with the Order, within 2 years from 22 September 20204.
  2. However, as per the Seventh Amendment, the Minister is required to announce a date of compliance for such employers (with expatriate employees) to comply with the Order, 
  3. The above change removes the statutory time period provided under the Sixth Amendment (i.e. 2 years from 22 September 2022) for the establishment of the minimum wage for expatriate employees, essentially delaying the period until a date of compliance is publicly announced by the Minister.

Effective Date

The Seventh Amendment became effective on 21 September 2022.

References

  1. Act Number 15/2022 (Seventh Amendment to Employment Act)
  2. Act Number 22/2020 (Sixth Amendment to Employment Act)
  3. Act Number 2/2008 (Employment Act)
  4. Effective date of the Sixth Amendment to Employment Act