Economic Ministry announced the minimum wage for businesses in Maldives on Monday, setting the minimum wage for small businesses at MVR 4,500, minimum wage for medium businesses at MVR 7,000, and the minimum wage for large businesses at MVR 8,000.
The Minimum Wage Board submitted its recommendations to the Economic Ministry back in October.
Minimum Wage Board’s recommendations:
The Economic Ministry conducted further analysis of the figures, and made the decision to adjust the minimum wage of small and large businesses to a lower rate than recommended by the Minimum Wage Board after considering cost implications and economic factors. No adjustments were made to minimum wage for medium businesses – which the public sector fall into.
Economic Minister Fayyaz Ismail signed off on the declaration on the minimum wage in a ceremony on Monday morning.
The minimum wage has been set at:
Speaking at the ceremony, Fayyaz said that the recommendations of the Minimum Wage Board were sound, but the government was unable to set the minimum wage at the recommended rates due to the economic implications of the COVID-19 pandemic.
Fayyaz said that both employers and employees have concerns in the current labor market. The biggest concern of employees is lack of benefits due to low wage, while employers are concerned with high employee turnover.
He said that the minimum wage will bring about positive changes.
“I believe the minimum wage rates declared today are good, given the current situation. I believe these are reasonable rates which will bring about positive changes to employees, and benefit businesses in the long run,” he said.
Fayyaz said that that a minimum wage should have been declared 20 years ago, and that the challenges the country had faced in declaring a minimum wage now could have been avoided.
According to Fayyaz, work on declaring a minimum wage first began in 2012, during former President Mohamed Nasheed’s administration. An Employment Act was passed and a Wages and Salaries Board was established.
The work was resumed again in 2019, after President Ibrahim Mohamed Solih came to power. A Minimum Wage Board was established, which, under advisement of international experts, recommended a national minimum wage of MVR 6,400.
However, Economic Ministry decided that a uniform minimum wage would open businesses to losses, and the Minimum Wage Board, after further analysis, recommended new figures for different business categories in October.
Fayyaz said the government was unable to implement the recommendations at this time, due to high risk of businesses going bankrupt and harm to employees given the vulnerable economic situation.
He said that it is expected to take two years for the Maldivian economy to rebound to pre-pandemic performance.