Expatriates’ Minimum Wage Determination Deferred

The determination of the floor of remuneration or minimum wage for expatriate employees working in the Maldives is officially deferred.

This result was achieved by the introduction of the Seventh Amendment to the Employment Act of 2008. The amendment came into effect on 21 September 2022.

In an earlier revision of the law, through the Sixth Amendment to the Employment Act, there was a provision for the determination of a minimum remuneration for all employees working across the length and breadth of the Maldives – local and foreign.

While that Sixth Amendment provided a mechanism for the determination of minimum wage for local Maldivian employees, the law also provided a grace period of 2 years for the introduction of minimum wage for expatriate employees. This mercy period was scheduled to expire on 21 September 2022.

The introduction of the Seventh Amendment was not designed to introduce a catalogue of changes to the employment law of the country. It simply focused on removing the obligation to create a minimum wage for foreign employees in the Maldives within 21 September 2022.

Under this recent revision of the law – there is no legal obligation now on the government to meet any specific long stop date or declare a minimum wage within a cutoff period. The determination of the minimum wage is now made a policy decision rather than a legislative one. The law enables the government to disassociate the minimum wage determination from any specific date; and to be guided by a set of circumstances relating to economy, gross domestic output and financial health of the Maldives which permit the declaration of a minimum wage for the foreign employees in the Maldives.

It is widely believed that the Ukraine war, rising cost of goods and services, increase in inflation while Maldives paddles its way through a post pandemic recovery post Covid may be some of the factors driving the government to change the law and push away an immediate obligation to decide the floor of remuneration for foreign employees.

By: MN

Photo: Courtesy of PSM News