This is a one-of-a-kind report that proposes the methodologies to set a minimum wage in the Maldives for the first time. It intends to support the Ministry of Economic Development and the newly constituted Salary and Wage Advisory Board (SAWAB) in their mandate to recommend and fix an adequate minimum wage at the national level.
Following an official request of the Government of the Maldives, the ILO conducted a study on assessing the needs of workers and their families, and economic factor to set a minimum wage for the country.
The report also recommends specific measures to ensure that the minimum wage system of the Maldives works effectively in line with international labour standards and ILO’s minimum wage policy guidelines, and also draws from international experiences. Most effective minimum wages should afford adequate protection to all workers (without discrimination) in an employment relationship.
The findings of the study balancing both the needs of the workers and their families and economic factors, enables to recommend that the monthly minimum wage of the Maldives be determined within the range of MVR6,000 and MVR6,500. However, the report advises that the decision should also analyse the impacts of minimum wages on key variables. For this purpose, the report presents the minimum wage impact-outcomes on the share of workers affected and the wage bill, at both national and sectoral levels; as well as on remittances - likely to increase with the new minimum wage.
An adequate minimum wage system opens the possibility of increasing job opportunities that match the aspirations of nationals, especially the youth. However, a minimum wage policy by itself will not be able to increase the participation of national workers in the labour market. Specific strategies are needed to increase employability and to close the gaps between the supply and demand of labour.