Kudu pushes fast action on bill to stop resorts converting workers’ service charge

Parliament was on Sunday asked to expedite work on an amendment to the Employment Act that would stop employers from converting service charges into Rufiyaa and instead require them to pay employees in dollars or in the foreign currency collected from tourists.  

The request was made in a letter sent to Speaker Abdul Raheem Abdullah by North Galolhu MP Kudu, who said tourism workers have “serious concerns” about losing the full value of their service charge due to currency conversion. He noted that the issue affects thousands of Maldivian employees and urged Parliament to take a decision on the bill “as soon as possible.”

What the amendment proposes

The amendment was moved by opposition MDP MP and Maldives Trade Union Congress (MTUC) President Mauroof Zakir. It states that:

• the portion of service charge allocated to employees cannot be converted into MVR  

• service charge must be paid in the exact amount received by the business  

• employees working under temporary contracts or through third-party hiring must receive service charge equally and without discrimination

Under current law, tourism businesses must charge a service charge of at least 10 percent, deduct a one-percent administrative fee, and distribute the remainder equally among staff. However, many workers have complained that resorts withdraw service charges in dollars and then pay employees in Rufiyaa, reducing the value of their income. These concerns have grown since resorts were required to convert a portion of their dollar earnings with the MMA and banks.

The bill passed its first reading on April 22 with a vote of 67-1 and has now been sent to a parliamentary committee for further review.