The Maldives Employment Act (Law No. 2/2008) sets the minimum requirements for employee benefits in the country, ensuring a baseline level of security and compensation for workers.

Paid Leave

Employees who complete one year of service are entitled to 30 days of paid annual leave. This leave must be taken within 12 months and cannot be carried over to the following year. Unused leave can be encashed before employment termination.

Employees are also entitled to paid leave on all official public holidays declared by the government of Maldives.

Sick leave with pay is another entitlement, although the specific details regarding the duration and eligibility criteria for paid sick leave may be determined by the employment contract or company policy.

Female employees are entitled to 60 days of fully paid maternity leave. An additional 28 days of unpaid leave can be taken for reasons related to childbirth or ill health.

Male employees are granted up to 3 days of paid paternity leave upon the birth of their child.

Either parent can take parental leave for up to 1 year.

Notice Period and Severance Pay

Both employers and employees are required to provide a notice period before terminating employment. The specific length of the notice period may be determined by the employment contract or company policy, but cannot be less than the minimums outlined in the Employment Act.

Employees who are terminated without just cause may be entitled to severance pay. The amount of severance pay is determined by a formula based on the employee's salary and length of service.

Other Mandatory Benefits

The Employment Act allows for a probationary period in employment contracts. The maximum duration of the probationary period is typically specified in the Act or relevant regulations.

Employees who work beyond the standard work hours are entitled to overtime pay. The specific rate of overtime pay is determined by the Employment Act or relevant regulations.

In the Maldives, employers often provide additional benefits to attract and retain talent, beyond the mandatory ones outlined in the Maldives Employment Act. Here's a look at some commonly provided optional benefits:

Health Insurance

Many employers in the Maldives offer health insurance plans for their employees, either partially or fully subsidized. These plans may cover medical expenses, hospitalization, and other health-related costs.

Allowances

• Housing Allowance: Due to the high cost of housing in the Maldives, particularly in the capital city of Malé, employers may offer a housing allowance to assist employees with their housing expenses.
• Transportation Allowance: An allowance to help with commuting costs, especially if the workplace is located outside an employee's residential area.
• Meal Allowance: Some companies may provide meal allowances or directly offer subsidized meals within the workplace.

Other Benefits

• Relocation Allowance: Companies may offer relocation allowance to cover expenses incurred by employees moving to the Maldives for work, particularly expatriate workers.
• Profit Sharing: Certain companies may offer profit-sharing programs, allowing employees to share in the company's success.
• Flexible Work Arrangements: In recent times, employers have begun offering flexible work arrangements, such as remote work options or flexible hours, to cater to employee preferences and work-life balance.

These are just a few examples, and the specific benefits offered by employers in the Maldives will vary depending on the company, industry, and position. Job seekers are encouraged to inquire about the benefits package offered by a potential employer during the interview process.

In the Maldives, health insurance requirements are divided into two categories: state-funded health insurance for Maldivian citizens and health insurance for migrant workers.

State-funded Health Insurance for Maldivian Citizens

The National Framework of Social Health Insurance Act (Act No. 15/2011) established a program for mandatory health insurance for all Maldivian citizens. This program provides basic health coverage funded by the government.

Health Insurance for Migrant Workers

The Maldives Immigration Act and its regulations on Work Visas for Migrant Workers mandate that employers secure medical insurance for migrant workers as a prerequisite for obtaining a work visa. There are no specific guidelines on the level of coverage required, but it should provide sufficient protection for medical expenses incurred during the employment period. Employers typically offer private health insurance plans to meet this requirement. These plans may cover hospitalization, doctor visits, medications, and other healthcare services.

Additional Information

While private health insurance is not mandatory for Maldivian citizens, many employers, particularly in the tourism industry, may offer it as part of their benefits package to attract and retain talent. This is because private health insurance often provides a wider range of coverage and access to better quality healthcare facilities compared to the state-funded program.

The Maldives has a dual approach to retirement planning for employees. This includes the Maldives Retirement Pension Scheme (MRPS) and private pension plans.

Maldives Retirement Pension Scheme (MRPS)

The MRPS was established under the Pension Act of 2009. It is a mandatory contributory defined contribution (DC) pension scheme for most formal sector employees.

Contributions

A total of 14% of salary is split between employers and employees, with a minimum of 7% each. Employers can choose to contribute the employee's portion as well. Self-employed individuals can voluntarily participate in MRPS and determine their contribution amount and frequency.

Investment

MRPS contributions are invested in a diversified portfolio of assets following guidelines set by the Pension Act, overseen by the Capital Market Development Authority.

Benefits

Employees can access their retirement benefits upon reaching the minimum retirement age (currently 55 years old) provided the accumulated funds are sufficient to provide a monthly pension at least twice the amount of the Maldives Old Age Basic Pension.

Private Pension Plans

While not mandatory, some employers in the Maldives may offer private pension plans as part of their employee benefits package. These plans can be a valuable supplement to the MRPS, providing employees with additional retirement income. Details of these plans, such as contribution structure, investment options, and benefits will vary depending on the specific plan offered by the employer.

The MRPS provides a foundation for retirement savings for most formal sector employees in the Maldives. Private pension plans can be a valuable way for employees to save more for retirement and achieve their financial goals. Employees are encouraged to understand both the MRPS and any private pension plans offered by their employer to make informed decisions about their retirement planning.