Labour Relations Authority (LRA) has published the new regulation on service charge, mandating tourist facilities to disburse service charge to employees even if they are on leave or vacation.
The service charge regulation states tourist resorts, hotels, guesthouses, liveaboards and other similar facilities are required to take a minimum service charge of 10% on each service provided by the facility. As such, diving centres, water sports facilities, excursion activities, café restaurants and other similar establishments in the facility are required to collect service charge, even if the services are outsourced to a third party.
The regulation further states all service charge must be collected and disbursed to all employees, without making any deductions for days on leave or vacation to which the employee is eligible. The regulation also states the employer can collect up to 1% of the total service charge collected during a month as an administrative fee.
Establishments violating the regulation can be fined depending on the size of the establishment. Furthermore, establishments that do not comply with LRA’s orders can be fined USD 650 for the first violation, and another USD 3,240 for every subsequent violation.