Minimum wage to be implemented by the end of 2021

Economic Development Minister Fayyaz Ismail | Photo: Sun

Malé, Maldives – Minister of Economic Development, Fayyaz Ismail has said that the government is committed to implement a decent minimum wage by the end of this year.

In a tweet posted by the minister, it read that even though 2020 was a year of hardship that 2021 was more hopeful and that minimum wage would be implemented according to the newly amended Employment Act. Minister Fayyaz also added that he hopes to have Industrial Relations Act and Occupational Health and Safety Act passed in 2021.

Ministers remarks on the matter come while Minimum Wage Advisory Board has recommended MVR 6,400 (USD 415) as monthly minimum wage. According to the law, minimum wage must be implemented by the end of the year.

Although minimum wage was initially proposed for seven sectors, two more were passed by the committee before the bill was passed by parliament. These include;

  • Fisheries and Agriculture
  • Tourism
  • Construction
  • Transport
  • Health
  • Education
  • Small and Medium Enterprises
  • Communication and Technology
  • Information

According to a report released by the board, roughly 40 percent of the Maldivian workforce were found to earn less than MVR 6000 a month. The International Labour Organisation (ILO) had also advised Maldives to set a minimum wage between MVR 6,000 and MVR 6,500.

Addressing public concern over the minimum wage being too low, Minister of Economic Development Fayyaz Ismail, had previously stated that forcing an unrealistic minimum wage may drive businesses to bankruptcy, leading to possible reductions in the number of total available jobs as well as other negative consequences.

He also urged the public to accept the minimum wage as decided by the state owing to the fact that the value could be amended every two years after a review. In the case of an economic emergency, said review can be conducted at an earlier date.

While government is set to announce minimum wages during this year, Minister of Finance and Treasury, Ibrahim Ameer had said on June 16, 2020 that this was not the time to declare minimum wage in Maldives and that it should be done in 2022.

Speaking in the Committee of Economic Affairs of the Maldivian Parliament, Minister Ameer said that although he supports the declaration of a minimum wage in the country, the first priority should be to revert the economy of the country to the status it was during the beginning of the pandemic.

“In my opinion, this isn’t the best time to declare minimum wage. We cant tell for sure how the economy of the world will change, (and with this) our economy.” The Minister said.

While the minimum wage advisory board has suggested MVR 6,400 as the minimum wage, Minister Ameer highlighted that out of the 44,838 employees of the private sector 22،378 employees receive a basic salary lower than this, which would require an additional MVR 2.3 billion should a minimum wage be set now.

As the declaration of a minimum wage is a presidential pledge of President Ibrahim Mohamed Solih, public criticism has been aimed at the government for the delay in announcing the minimum wage of the country.