Located in South Asia, Maldives has become a hot spot for entrepreneurs in recent years. The country recorded a GDP of 5.502 billion USD in 2022, a rise from its GDP in the previous two years. Furthermore, the country has a young and rising labor force, making it the ideal market for businesses to expand.
The labor regulations in Maldives are primarily governed by the Employment Law, which was enforced in 2008 and has since been amended several times. A comprehensive understanding of employment laws can help companies better navigate the country.
To know about how to hire people in Maldives, keep reading.
Things To Know Before Hiring in Maldives
Employment contract: In the Maldives, it is mandatory for employers to provide a written employment contract to their employees. The contract must contain the following information:
- Employer’s and employee’s details
- Date of commencement
- Type of employment (permanent or fixed term)
- Salary and allowances
- Date of remuneration payment
- Method using which remuneration will be calculated
- Performance appraisal policies
- Grounds for disciplinary measures
- Leave entitlements
- Conditions for dismissal
In addition to the employment contract, employers should also provide written job descriptions to their employees within one month of commencement of employment. Failure to provide a job description will result in penalties.
- The maximum working hours in a week in the Maldives is 48 hours.
- After six consecutive work days, employees are entitled to one day off per week (usually Friday).
- Any additional work hours done by employees after 48 hours a week is considered overtime.
- Overtime work done on regular working days is compensated with a payment equivalent to 1.25 times the employee’s hourly salary rate.
- In the case of overtime done on Fridays or public holidays, the compensation rate is 1.5 times an employee’s hourly salary rate.
- Payment for overtime work should be distinguished in the employee’s payslip.
- Employees are entitled to 30 days of sick leave each calendar year.
- However, for absence from work due to sickness for two consecutive days, a medical certificate should be provided on the first day back to work.
- Employees who have completed one year of uninterrupted service in a company should be given 30 days of paid annual leave.
- During this time, employers are forbidden from engaging employees in any work.
- Pregnant employees are entitled to 60 days of paid maternity leave.
- This leave begins 30 days before the estimated due date of the baby.
- An additional unpaid 28 days of maternity leave can be applied for when an employee cannot resume work after giving birth.
Family responsibility leaves:
- In case of sick spouses, children, or parents, employees can get up to 10 days of paid family responsibility leave each year.
There are 17 recognized public holidays in the Maldives:
New Year’s Day
First day of Ramadan
Independence Day Holiday
Independence Day Holiday
Islamic New Year
National Tourism Day
The day Maldives embraced Islam
Tax bracket (in MVR)
Less than 720,000 per year
720,001 to 1,200,000 per year
1,200,001 to 1,800,000 per year
1,800,001 to 2,400,00 per year
More than 2,400,00 per year
Social security obligations:
- Both employers and employees make contributions towards the Retirement Pension Scheme at a rate of 7% each, as mandated by the law.
- The notice period in the Maldives depends on an employee’s length of service.
Length of service
6 months to 1 year
1 year to 5 years
More than 5 years
- In case an employer decides to do away with the notice period, they are required to pay remuneration in lieu of the notice period.
The Cost of Hiring an Employee in Maldives
There are several costs associated with recruitment and selection in the Maldives. The main expenditures are:
- Employee salaries and social security contributions
- Payable bonus
- Job advertisement costs
- Interview process costs
- Employee training and orientation costs
What Does a Company Need to Hire Employees in Maldives?
To hire staff in Maldives, a company needs to be established in the country first. There are different legal structures when it comes to businesses in Maldives. To set up a private limited liability company, the documents required are:
- Articles of Association
- Memorandum of Association
- Company registration application form
- Company name search and reservation form
- The original identification of company directors and shareholders
- Acknowledgement letter from the company secretary and chief executive officer
Various Options For Hiring Employees in Maldives
Primarily, there are two ways in which companies can hire employees in Maldives. These options are given below:
- By establishing your company: To hire employees in Maldives, it’s necessary to first physically establish one’s company. Starting a business in this country requires a lot of paperwork and a comprehensive understanding of the local employment laws, both of which can be time and resource-consuming.
- Through an EOR: An EOR or employer of record helps companies by employing talents in foreign countries on their behalf. Since EOR platforms, like Multiplier, are well-versed with local laws and regulations, this can be considered a much better option.
The Steps to Hiring in Maldives
The hiring process in Maldives is similar to other countries and consists of the following steps:
Step 1: Companies are required to post job advertisements on online forums and in newspapers encouraging CV submissions. The job advertisement should contain details about the job description and the kind of candidates the companies are looking for.
Step 2: Once companies have received enough CVs, they should go through all of them to shortlist the most desirable candidates.
Step 3: After shortlisting, companies can opt to have a short interview with the chosen candidates over the phone before arranging a proper interview (in-person or online).
Step 4: Some companies might choose to conduct more than one interview. For instance, in the hospitality sector, companies arrange interviews with HR, various managers, department heads, and so on.
Step 5: After the completion of interviews, the ideal candidates are selected, and subsequently, the onboarding process can begin. This step mainly comprises finalizing paperwork and training (if required).
Let Multiplier be Your EOR Platform in Maldives
In recent years, Maldives has become a hub for international investments. Companies looking to hire top talent in this country may find it challenging to understand and comply with every aspect of the local labor laws and regulations. Hence, businesses these days partner with PEO firms, like Multiplier, to ease employment processes in the Maldives and shift more focus on their company’s core activities.
With our years of experience and technology-based approach, we will help you navigate employment in the Maldives. Multiplier is known to provide a robust hiring infrastructure, along with payroll and employee management, employment contract generation, and so on, all in one platform. So, if you are thinking of recruitment and selection in Maldives, reach out to us for a seamless experience.