The Ministry of Economic Development has published the Salary Enforcement Regulation on 24th November 2016 that sets out the administrative rules to be followed by employers under the Fifth Amendment to the Employment Act
The Fifth Amendment to the Employment Act requires that employers who employ persons under a work visa or who require a work visa to pay the remuneration of such employees directly to their Maldivian bank accounts. The Regulation explains the rules to be followed by employers making salary payments and imposition of fines and enforcement actions in case of non-compliance.
Under the Regulation, employers will have a period of 30 days to open a bank account for a foreign employee entering the Maldives following which all salary payments must be made in accordance with the Employment Act and Regulation. The Regulation gives details of payments considered as a foreign employee’s remuneration, as well as circumstances when salary may be paid in cash, what is not considered a part of the foreign employees remuneration and documents to be maintained by employers.
Employers who fail to pay a foreign employee’s salary and other amounts will be subject to an incremental fine. Foreign employees may also file a complaint with the Ministry against an Employer who does not pay their salary upon which the Ministry will take administrative actions to enforce payment.
The Regulation is crucial for the implementation of Remittance Tax, which was introduced on 1 October 2016.
