In his state of the nation address to Parliament for 2020, President Ibrahim Mohamed Solih gave his first clear signal on 3 February that the Maldives Government would introduce minimum wage in the country this year.
Amending Employment Law
As a first step, a legislative proposal in the form of an amendment to the Employment Act is today tabled in the Maldives Parliament. One of the legislative proposals contained in this amendment bill relates to the mechanism to declare minimum wage remuneration amounts.
This government sponsored bill does not decide minimum wage nor does it declare guidelines systems or thresholds for specific industries, sectors, professions or services.
Minister to Decide Floor of Remuneration
This amendment bill primarily proposes to task the Economic Minister with the responsibility to decide the minimum wage for those working in the Maldives. According to the proposal, the Minister is to be advised by a Minimum Wage Board in arriving at his minimum remuneration determinations.
An Advisory Board
As a creature of this bill, it is proposed that the Board will advise the Minister on policies, strategies and research on applicable minimum wage frameworks and systems; the minimum amounts for industries and sectors such as fisheries, tourism, construction, travel, health, education, and SMEs.
The Board is also asked to review the minimum remuneration amounts determined by the Minister every two years and make recommendations on their revisions.
The Board is tasked to factor in several considerations in making their recommendations to the Minister on specific minimum remuneration amounts. Some of those include necessities, cost of living, social security benefits, standard of living, economic development matrices, and opportunities for employment.
Promulgation of Remuneration Amounts
The Minister is to publish the minimum amounts and decide the floor of remuneration applicable for various industries and sectors by way of a ministerial decree. He is required to do that within 30 days of receiving the Board’s recommendations. The Minister may in promulgating the minimum wage system decide on the applicable hourly rate, overtime rate, or remuneration for parts of the work.