Amendment to Mandate Service Charge Payments in Dollars Accepted

An amendment requiring service charges to be paid in US dollars has been accepted by Parliament today.

The amendment to the Employment Act proposes that service charges collected from employees working in the tourism industry must no longer be converted into Maldivian Rufiyaa by employers, but instead be paid directly in dollars. The bill was submitted by the opposition MDP and was accepted for consideration with the votes of 67 members.

The amendment was proposed by Kendhoo MP and President of the Maldives Trade Union Congress (MTUC), Mauroof Zakir. Its main objective is to provide a legal solution, as existing laws do not mandate that service charges be paid directly in dollars.

The bill has now been forwarded to the relevant parliamentary committee for further review.

According to the proposed amendment to Section 52 of the Employment Act, employers would be prohibited from converting service charge amounts into Maldivian Rufiyaa. It also specifies that employees must be paid their share of service charges in the same currency in which the funds are received.

Additionally, the amendment prohibits discrimination in the distribution of service charges, ensuring equal treatment of employees regardless of whether they are hired under temporary agreements or through third parties.

Under current law, businesses in the tourism sector are required to collect a service charge of no less than 10% on services provided. Of this, 1% is deducted as an administrative fee, while the remaining amount must be distributed among employees. However, there is currently no legal requirement for these payments to be made in dollars.