Maldivian employers—especially those operating large-scale businesses—should take note: the five-year grace period provided under Law No. 22/2020 (Sixth Amendment to the Employment Act) will expire on 22 September 2025. This means that several critical workforce localisation provisions, including quotas for senior management and mandatory reporting, will become fully enforceable from that date.
As legal advisors committed to supporting businesses in navigating employment compliance, we outline below the key requirements that will soon take effect and what employers should do to prepare.
Key Changes Effective from 22 September 2025
1. Mandatory Local HR Leadership
Under Article 74-1(b), all companies employing more than 50 staff must appoint a Maldivian national as Head of Human Resources. This applies to both local and foreign-owned entities operating in the Maldives.
Action Point: Companies should review their current HR leadership structure and plan for a qualified Maldivian successor if not already in place.
2. 60% Maldivian Representation in Senior Management
Perhaps the most significant change is introduced under Article 74-1(c), which mandates that 60% of senior management positions must be held by Maldivian (Dhivehi) employees in companies with more than 50 staff.
The Ministry is expected to issue detailed regulations specifying which roles qualify as “senior management” for the purposes of this requirement.
Action Point: Employers should begin succession planning and capacity-building for local talent in leadership roles, ensuring alignment with the 60% threshold.
3. Annual Reporting to Labour Relations Authority
Pursuant to Article 74-1(e), affected companies must submit an annual workforce composition report to the Labour Relations Authority, before a date that will be specified in forthcoming rules. This information will also be made public.
Action Point: Establish internal processes to collect, verify and report data on workforce and senior management, in preparation for upcoming regulatory deadlines.
4. Inclusion of Senior Citizens (Aged 55–65)
Another progressive step in this amendment is the inclusion of older employees. Article 74-1(f) requires employers to ensure adequate employment opportunities for qualified individuals aged 55 to 65, supporting their continued economic participation.
Action Point: Review recruitment and diversity policies to ensure fair employment opportunities for this age group.
5. Penalties for Non-Compliance
Failure to comply with the HR leadership and senior management localisation mandates could result in administrative fines of up to MVR 100,000, as provided under Article 74-1(g).
Action Point: Non-compliance is not just a regulatory risk—it could impact the company’s reputation and future licensing or approval processes.
Our Recommendation
With the 22 September 2025 deadline fast approaching, we strongly advise all employers to:
- Conduct an HR and management compliance audit.
- Begin succession planning and talent development for Maldivian staff.
- Monitor updates from the Ministry of Economic Development and Labour Relations Authority.
- Review employment policies and prepare for regulatory reporting obligations.