Parliament accepts bill mandating service charge payment in USD

The Parliament has accepted a proposed amendment to the Employment Act that would prohibit employers in the tourism sector from converting service charges into Maldivian Rufiyaa, instead requiring that such payments be made to employees in US dollars or in the original currency in which they were collected.

The bill, submitted opposition MDP’s Kendhoo constituency, Mauroof Zakir, was accepted with the votes of 67 lawmakers. It has subsequently been forwarded to the Committee on National Security Services (241 Committee) for review.

The main objective of the amendment is to revise Article 52 of the Employment Act to ensure that service charges collected from tourists are disbursed to employees in the same currency in which they were received.

Mauroof noted that, under the current legal framework, there is no explicit requirement for service charges to be paid directly in US dollars, leading to some resorts to convert these funds into Maldivian Rufiyaa prior to disbursement to employees. This issue has become a prevalent concern among workers in the tourism sector, particularly in light of recent regulations by the Maldives Monetary Authority (MMA) mandating the exchange of foreign currency by resorts.

The proposed amendment explicitly provides that employers must not convert service charge into Maldivian Rufiyaa for the purpose of altering the currency of payment to employees.

Additionally, the amendment stipulates that service charge distribution must not discriminate against employees working under temporary arrangements or through third-party agencies, provided they are directly involved in service delivery.

Existing employment legislation requires a minimum service charge of 10 percent on all services within the tourism sector. While the law mandates that 99 percent of the collected amount be distributed equally among staff, after the deduction of a one percent administrative fee, it does not currently specify the currency in which such payments must be made.

Upon completion of the committee stage review, the bill will be returned to the parliament floor for a final vote. Workers’ unions regard this measure as an important step toward safeguarding the value of income earned by resort employees.