On 22 September 2020, the President ratified the Sixth Amendment to the Employment Act (Law Number 22/2020) (the Amendment), which requires the government to set a minimum wage for employment undertaken in the Maldives.

The Amendment establishes a Minimum Wage Advisory Board (the Board) to advise the Minister of Economic Development (the Minister) on setting a minimum wage. The 11-members Board consists of a representative of the Ministry of Economic Development as the chairperson, a representative of the Ministry of Finance, a representative of the tourism sector, a representative of the construction sector, a representative of small and medium enterprises, a representative of female entrepreneurs, and 5 representatives of employee advocacy associations.

The Minister is required to issue a Minimum Wage Order within 30 days of receiving such advice from the Board. All employers in the Maldives must adhere to the Minimum Wage Order before the end of 2021, except for foreign employees, for whom employers must ensure compliance by 22 September 2022.

The Amendment requires the Minister to review the minimum wage at least once every 2 years, or more frequently if deemed necessary under special economic circumstances.

The Amendment mandates the Board to take into account sector-specific factors when setting a minimum wage, namely for the fisheries and agriculture sector, tourism sector, construction sector, transportation sector, health sector, education sector, small and medium enterprises, information, communication and technology sector, and the maritime industry.

In addition to setting a minimum wage, the Amendment makes it mandatory for businesses operating in the tourism sector to collect a service charge of at least 10% from customers and distribute the collection equally amongst employees who are directly or indirectly involved in providing services to customers. Such businesses are also required to submit a report on service charge collection and distribution, twice a year, to the Labour Relations Authority and the Maldives Inland Revenue Authority (MIRA).

The Amendment comes into immediate effect, except for the provisions relating to service charge, which would come into effect on 1 January 2021. The Amendment Bill was presented to the parliament on 10 February 2020 and passed on 6 September 2020.