TEAM Criticises Currency Conversion Impact on Tourism Employees

The Tourism Employees Association of Maldives (TEAM) criticised the impact of amendments to the Foreign Exchange Act on Thursday, which converts salaries and service charge payments from US Dollars to Maldivian Rufiyaa.

The new law, effective from January 2025, requires foreign exchange-earning businesses, including resorts, to exchange either USD 500 per tourist or 20 percent of their revenue into Maldivian Rufiyaa.

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As a result, some resorts have begun paying salaries and service charges in local currency instead of US Dollars, prompting criticism from TEAM. The organisation has called for government intervention, citing the financial strain the changes have imposed on workers.

Financial Challenges for Employees

TEAM highlighted several issues caused by the currency conversion. Workers reportedly experience a reduction in income, with losses estimated between MVR 3,000 to MVR 5,000 when salaries and service charges are paid in Maldivian Rufiyaa. The rising cost of goods and living expenses further exacerbates the financial burden on employees, impacting their ability to maintain financial stability.

The organisation also highlighted the challenges faced by foreign workers, who make up approximately 70 percent of the tourism sector’s workforce. Many rely on earnings in US Dollars to support their families abroad, and currency conversion adds a layer of difficulty for them.

Call for Government Action

TEAM has urged the government to address the situation by halting the conversion of salaries and service charges into Maldivian Rufiyaa. Additionally, the organisation stressed the importance of preserving the original terms of employment contracts, arguing that altering payment agreements undermines financial security for workers in the tourism industry.

Despite TEAM’s concerns, the government has not yet responded or provided clarity on the potential impact of the amendments on tourism sector employees.

Mauroof Zakir, the general secretary of TEAM and Parliamentarian for the Kendhoo constituency, posted on X that the government must take responsibility for limiting the US Dollars resort workers receive. 

Quote posting the statement made by TEAM, Mauroof said in Dhivehi, the native language of the Maldives, the government is passing these laws during times when the government is receiving US Dollars at “amounts they have not in recent times.” he accused the government of misusing their supermajority at the parliament as well. 

“Workers will have to organise and stand against mistreatment,” Mauroof said in Dhivehi.