Expatriate resort workers have expressed confusion over new regulations restricting monthly remittances to 100 percent of workers’ salaries, which they fear may may leave them unable to take supplementary income, such as tips and service charges, out of the country.
The government has said the decision, published in mid-May in the government gazette, was intended to reduce the amount of money sent overseas by those working in the country illegally, either without a work permit or by taking jobs ‘on the side’.
Workers exceeding the limit, and organisations providing the transfer facility, would face a fine.
However, in many of the country’s resorts, service charges and ‘unofficial’ tips can amount to up to 70 percent of a worker’s total income.
“If the transfers are limited to salaries then the tips and service charges will be considered illegal money,” one foreign worker, a guest relations officer (GRO), told Minivan News. “For me that is 75 percent of my income.”
The GRO added that due to the isolation of some resort properties, workers would be unable to reach a bank every month to send their income home.
“There is one ferry a week [to an island with a bank], but not my home branch. To go to Male’ the flight costs US$200 – I can’t transfer money every month, and I can’t spend all my money in the Maldives,” she said.
A lack of information outside local media reports in Dhivehi meant that many foreign staff were in the dark over the pending changes.
“Nobody is sure what is going on. This [lack of confidence] may encourage people to take their money out of the system altogether,” she predicted.
Several foreign workers Minivan News spoke to at a hotel near Male’ also expressed confusion and frustration over what they feared could be a financial impracticality to continuing to work in the Maldives. They noted that the hotel was to begin paying all staff in rufiya, following the Maldives Monetary Authority (MMA)’s recent announcement that it would enforce transactions in the country’s legal tender.
Minivan News contacted a range of authorities dealing with monetary policy, but was unable to get a clear indication of what the regulations would mean for foreign workers.
State Minister for Finance Ahmed Assad and Minister for Economic Development Mahmoud Razee both said they were not in a position to clarify the matter and referred Minivan News to the MMA.
Assad suggested that while the Ministry published official notices in Dhivehi, employers had a duty to keep their foreign employees informed of the implications of any changes to policy.
Assistant Manager of the MMA’s Monetary Policy and Research Division, Ibrahim Ameer, told Minivan News that he understood the regulations were currently pending with the Ministry of Human Resources and that income from resort workers would be taken into consideration, however he noted claims in media reports on the regulation that only basic salaries could be remitted.
A spokesperson for the Ministry of Human Resources meanwhile referred Minivan News to Deputy Minister Hussain Ismail, who was not responding at time of press.
Head of the Tourism Employee Association of the Maldives (TEAM) and Maldivian Democratic Party (MDP) MP Ahmed Easa told Minivan News that the organisation had met with the MMA when the regulations were being drafted and that he understood workers would be able to send their full incomes overseas on presentation of their work visa to the bank.
“The idea is to stop illegal workers from remitting money,” he said. “I think it is tied to income rather than salary, as long as the proper documents are provided. It should not be a problem so long as workers have a work permit. That’s what I have been told, and I haven’t received any complaints yet.”
However, earlier reports on the regulation have suggested it would encompass not just illegal workers, but those taking on ‘unofficial’ extra work – a common practice for many of Male’s expatriate workers, some of whom are paid as little as US$70 a month for full-time construction work. In many cases, this is despite reported promises of salaries of up to US$400 by unscrupulous employment brokers, who charge poor and illiterate people in countries such as Bangladesh fees of between US$3000-4000 to come and work in the Maldives.
The dollar crisis in the Maldives has brought to the fore the remitting of salaries by expatriate workers. In a recent report, Ameer from the MMA noted that “each expatriate worker will on average remit US$100 per month to their countries. That is US$8 million per month and US$96 million a year. This is an amount that can and should be mitigated.”
Easa told Minivan News that the Human Resources Ministry, “to be honest, has nothing to explain. The Maldives can’t afford this, and we have to have rules to stop the existing open environment.”
The Immigration Department meanwhile reported that the number of expatriates in the country would reach 100,000 by June, after increasing by 10,000 in just three months. The report came as the Ministry of Human Resources published regulation permitting the recruitment of domestic servants without a quota.
The payment of salaries to foreign workers in rufiya is also a concern raised by foreign workers, concerned at their inability to convert the local currency to dollars.
“It may be difficult at this time, but the MMA is reinforcing a law from the early 1980s,” Easa noted. “All these years the MMA has not enforced the law. Right now we have a shortage of foreign exchange, and [expatriates] might face difficultly for a couple of months. But the country doesn’t have a choice.”
TEAM’s Vice President Mauroof Zakir acknowledged receiving concerns from resort workers regarding payment in rufiya.
“We received complaints where workers wanted salary in dollars in instances where the business is earning dollars,” he said, adding that this was already the case for many executive staff who had money paid into accounts outside the Maldives.
Furthermore, Zakir noted complaints from staff who’s wages were now being paid at a rate of Rf 10.42 to the dollar – the minimum rate following the government’s float of the rufiya within a 20 percent band of a pegged Rf12.85 – despite bank rates sitting at Rf 15.42.
“They don’t know the rate at which management is getting dollars,” he said. “I think it is a big concern that the government is not doing anything to raise awareness [for expatriate workers], apart from releasing statements to local media in Dhivehi.”
During a recent interview with Finance Minister Ahmed Inaz, Minivan News questioned the enforcement of rufiya at a time when there was doubt as to whether this could be exchanged into dollars, and the impact this would have on confidence in the Maldivian economy.
“We believe the market is currently unstable because of the changes we have brought, and that these changes will take three months for the various variables to work,” Inaz acknowledged.
“There will be a lot of low confidence and instability, and that will not only be felt by the expatriates. All our imports and consumables, medicine, education – is imported. But we are confident we can get through this.”
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