Minimum Wage Decided

The floor of remuneration applicable for public and private sector industries in the country is now officially laid down.

The determination came on 8 November 2021 from the Minister of Economic Development acting under sections 59 and 62 of the Employment Act.

The decree allows the inclusion of basic salary and fixed allowances in computing minimum rates of remuneration due to an employee.

The following payments are excluded from the computation of minimum remuneration: overtime pay; Ramadan allowance; service charge; temporary allowances (based on task circumstance or period); bonus; in-kind benefits or payment offered in lieu of such benefits.

Micro enterprises are exempted from the requirement of minimum remuneration; small enterprises are to provide an hourly rate of MVR 21.63; medium enterprises are to give an hourly rate of MVR 33.65; every other enterprise that is not within the classification of micro, small or medium industries is to pay an hourly rate of MVR 38.46; and everyone else is to arrange an hourly rate of MVR 21.63.

Basic salary is defined for the purposes of this determination as the basic remuneration specified in the Employment Contract less certain authorized deductions: deductions made under s20 of the Employment Act; pension contributions made under the Pension Act; withholding tax charged under the Income Tax Act.

Fixed allowances are defined as those that are specified in the Employment Contract, and paid every month without deduction.

Private sector enterprises are to include all forms of business enterprises including those with government shares.

The declaration excludes the application of the regime on overseas employees.

The floor of remuneration is to take effect from 1 January 2022 and is to remain in force unless withdrawn, amended or replaced.

The law requires these rates to be reviewed at least every 2 years.



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