Parliament accepts bill on service charge payments

Parliament has accepted a bill proposed by the opposition Maldivian Democratic Party (MDP) to amend the Employment Act.

The bill seeks to require that service charges collected in the tourism sector be distributed to employees in the same currency in which they are received.

The amendment was introduced by Member of Parliament for Kendhoo constituency Mauroof Zakir. It was accepted for consideration during Wednesday’s sitting with 67 votes and has been forwarded to the Committee on Security Services for review.

Under the current Employment Act, tourism establishments are required to apply a service charge of at least 10 per cent on services. After deducting a 1 per cent administrative fee, the remaining amount must be distributed among employees. The law does not specify the currency in which these payments must be made.

The proposed amendment introduces provisions to prevent employers from converting the portion of service charge due to employees into Maldivian Rufiyaa.

It states that service charges must be paid in the currency in which they were collected.

Mauroof said the amendment addresses practices where service charges collected in foreign currency are converted before being distributed to employees.

In most tourism establishments, service charges are collected in US dollars.

The bill also includes a provision stating that service charge distribution must not discriminate between employees, including those on temporary contracts or engaged through third-party agencies.

The amendment follows concerns raised over the handling of service charge payments and recent requirements for foreign currency exchange with the Maldives Monetary Authority.