Amendment to prohibit payment of service charge to tourism workers in MVR

An amendment has been submitted to Parliament proposing that service charges earned by tourism sector workers be paid directly, without converting the currency, whether earned in US dollars or Maldivian Rufiyaa.

The amendment to the Employment Act, proposed by Kendhoo MP Mauroof Zakir of the main opposition MDP, seeks to prevent employers from converting service charges payable to employees into Maldivian Rufiyaa. In this regard, the amendment states the service charge must be paid to employees in the currency it was earned.

Mauroof also proposed a second amendment, one aimed at prohibiting employers from discriminating between employees when paying service charge, even if the said employee is a temporary hire or third-party hire.

According to Mauroof, the amendment was proposed because employees are not receiving the full benefits of the service charge. He emphasized that tourism sector businesses are required to levy a 10 percent service charge on all services provided. However, Mauroof highlighted that employers often convert the service charge into Maldivian Rufiyaa when paying employees, instead of disbursing it in the original currency received, thereby denying workers the full benefits guaranteed under the law.

Hence, he said the amendment is aimed at ensuring the full benefits of service charge for tourism sector businesses under the Employment Act.

Resort workers have repeatedly expressed concerns about receiving service charges in Maldivian Rufiyaa instead of the US dollars in which they are earned. These concerns become particularly acute during periods of US dollar shortages, when conversion rates soar dramatically.