MDP proposes amendment requiring resorts to pay service charge in USD
The proposed amendment would require service charges to be paid in the currency in which they are collected, including United States dollars.
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The opposition Maldivian Democratic Party (MDP) has submitted a bill to parliament seeking to amend the Employment Act to prohibit employers from converting service charges into Maldivian Rufiyaa when paying resort employees.
The proposed amendment would require service charges to be paid in the currency in which they are collected, including United States dollars.
The amendment was proposed by Kendhoo MP Mauroof Zakir on behalf of the MDP. It aims to establish a legal requirement for the direct payment of service charges in dollars where such charges are collected in dollars.
Article 52 of the Employment Act states that businesses in the tourism industry must levy a service charge of not less than 10 percent on all services provided. Employers may deduct 1 percent as an administrative fee, with the remainder distributed equally among employees. The Act, however, does not specify that service charges must be paid in the same currency in which they are collected.
Mauroof, who also serves as president of the Maldives Trade Union Congress (MTUC), proposed inserting two subclauses after the second paragraph of Article 52(b). The proposed additions are:
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1-
Employers shall not convert service charges into Maldivian Rufiyaa for the purpose of altering the currency paid to employees.
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2-
Service charges shall be paid to employees in the same currency in which they are received.
Speaking to Atoll Times, Mauroof said the current law allows employers to convert service charges into Maldivian Rufiyaa before paying staff, despite charges being collected in dollars. He said the amendment seeks to remove ambiguity and ensure that payments reflect the currency collected from tourists.
Most tourism establishments collect service charges in dollars. Employees have previously raised concerns that payments are made in Maldivian Rufiyaa after resorts withdraw dollar-denominated service charge income. These concerns increased after the Maldives Monetary Authority (MMA) introduced requirements for resorts to deposit a portion of their dollar revenue.
A further amendment proposed in the bill states that tourism businesses must not discriminate in the distribution of service charges between permanent employees, temporary workers, and staff employed through third-party contractors.
Mauroof said the intent is to prevent situations in which workers employed by third-party operators within resorts, such as dive centres, receive service charges in a different currency or under different terms from other resort staff.
