Upcoming compliance obligations under the Employment Act (Sixth Amendment)

An important deadline is fast approaching that demands the attention of all resort operators, hotel groups, and hospitality employers across the country.

Under Law No. 22/2020 – the Sixth Amendment to the Employment Act – several key provisions under Article 74-1 are set to come into force on 22 September 2025, marking the end of a five-year transitional period. These changes have significant implications for the composition of HR leadership, senior management, and broader workforce planning.

Here’s a breakdown of the compliance requirements and what you need to do now to be prepared:

Key Compliance Obligations Under Article 74-1

1. Local Head of Human Resources Requirement

Subsection (b):
Companies employing more than 50 staff must appoint a Maldivian national as the Head of Human Resources.

Action Required:

• Assess your current HR leadership.

• If the role is held by a non-Maldivian, initiate a recruitment or succession planning process to identify a qualified local candidate before the deadline.

2. Senior Management Composition Requirement

Subsection (c):
At least 60% of senior management in companies with over 50 employees must be Maldivian nationals.
Regulations defining “senior management” are expected from the Ministry of Economic Development.

Action Required:

• Review your senior leadership structure.

• Identify gaps and start succession planning, training, and internal promotion initiatives focused on developing Maldivian leadership talent.

• Monitor upcoming definitions and regulations to align your planning accordingly.

3. Annual Reporting Obligation

Subsection (e):
Employers subject to Article 74-1 must submit employee composition data to the Labour Relations Authority (LRA) annually. The LRA will make this data public.

Action Required:

• Establish or enhance internal HR systems for accurate data tracking.

• Assign responsibility for report preparation and compliance with submission deadlines once announced.

4. Employment of Senior Citizens (Aged 55–65)

Subsection (f):
Companies are required to provide employment opportunities for qualified and experienced individuals aged 55–65.

Action Required:

• Review and revise recruitment policies to include this demographic.

• Consider roles, mentorship programs, or part-time options that support age-inclusive hiring.

5. Penalties for Non-Compliance

Subsection (g):
Non-compliance with subsections (b) and (c) may result in administrative fines up to MVR 100,000.

Action Required:

• Avoid last-minute adjustments. Full compliance before the deadline ensures you mitigate risk of financial penalties and reputational damage.

Recommendations for Hospitality Employers

• Conduct a full compliance audit of your workforce and leadership team.

• Plan for succession in HR and senior roles with a focus on Maldivian talent.

• Assign a compliance lead to track new regulations and coordinate timely reporting.

• Incorporate age-diverse hiring into your HR policies to support senior citizens in the workforce.

These upcoming legal requirements are not just about compliance – they represent a broader commitment to local talent development, inclusive employment, and sustainable human capital growth in the Maldives. With the deadline fast approaching, hospitality businesses should act now to align operations with the law and set the stage for long-term success.