PCB Issues Ramadan Allowance Directive, LRA Urges Employer Compliance

The Privatization and Corporatization Board (PCB) has issued a directive addressing the payment of Ramadan allowances for employees working in state-owned companies. The aim of these guidelines is to ensure compliance with Maldivian employment law while taking into consideration the potential impact on company cash flow.

Allowance Requirements

In line with the Employment Act, the PCB circular mandates a Ramadan allowance of MVR 3,000 for each eligible employee. The PCB further clarifies that employees who hold multiple salaried positions are only entitled to receive the allowance from their primary place of employment.

Exclusions and Adjustments

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The circular specifies that employees who are currently on either paid or unpaid leave will not be included in the Ramadan allowance disbursement. However, should these employees return to active duty during the month of Ramadan, they will become eligible for the allowance from the date of their return and for the remainder of the Ramadan period.

Newly hired employees qualify for the Ramadan allowance. The PCB also instructs that if any adjustments to the allowance amount are necessary, they should be made in conjunction with this month’s salary payment.

Additional Considerations

While not legally stipulated, if companies are providing additional gifts or benefits to employees in observance of Ramadan, PCB encourages that these gestures do not negatively impact the company’s financial position.

The PCB emphasizes the importance of adhering to these circular guidelines when disbursing Ramadan allowances to eligible employees.

The Labour Relations Authority (LRA) in the Maldives has also issued a press release urging employers across the nation to comply with regulations mandating Ramadan allowances for Maldivian employees. The LRA emphasized Section 51 (a) of the Employment Act of the Maldives (Law no: 2/2008), which guarantees each Maldivian worker an allowance of MVR 3,000/- (three thousand Maldivian rufiyaa) to be disbursed before the start of Ramadan.

The press release comes in response to reports that some employers have been neglecting their obligation to pay the Ramadan allowance as stipulated in the Employment Act. The LRA strongly requests all employers to make the necessary payments for the Ramadan period of 1445, in accordance with the law.

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