Crew Employment Compliance: MLC 2006 and Beyond

Crew employment compliance in the superyacht and commercial maritime sectors has evolved considerably since the Maritime Labour Convention (MLC 2006) entered into force in 2013. What began as a consolidation of existing maritime labour standards has become the foundation for an expanding compliance landscape—one that intersects with flag state requirements, port state control inspections, and increasingly, the beneficial ownership and AML/CTF frameworks reshaping maritime regulation.

This analysis examines the current MLC compliance landscape, the areas where operators encounter difficulty, and the emerging trends that yacht management companies, family offices, and vessel operators should be positioning for in 2026.

MLC 2006: The Architecture

The Maritime Labour Convention consolidated over 60 existing ILO maritime conventions into a single instrument. Ratified by over 100 countries representing more than 96% of global gross tonnage, it establishes minimum standards across five titles: minimum age, seafarer employment agreements, hours of work and rest, health and safety, and social security.

For vessels of 500 GT and above engaged in international voyages, MLC certification is mandatory. But the Convention’s reach extends further than many operators appreciate. Flag states may apply MLC requirements to smaller vessels. Port state control authorities inspect visiting vessels for MLC compliance regardless of size. And the practical expectations of crew—informed by MLC standards even aboard vessels technically outside its scope—create a baseline that prudent operators meet irrespective of technical obligation.

The Superyacht Position

Superyachts occupy a particular position within MLC compliance. Private yachts not engaged in commercial trade are technically outside the Convention’s mandatory scope. But the moment a vessel enters charter operations, the position changes. And even for purely private vessels, flag state national legislation frequently extends MLC-equivalent protections to crew aboard yachts of certain sizes.

The practical reality: most superyachts over 24 metres operating with professional crew should be compliant with MLC standards as a baseline, regardless of whether the Convention technically applies to their specific configuration.

Seafarer Employment Agreements

The Seafarer Employment Agreement (SEA) is the cornerstone of MLC compliance and the document most frequently scrutinised during port state control inspections. The Convention specifies minimum content requirements, but effective SEAs address considerably more than the statutory minimum.

Required Elements

MLC 2006 Standard A2.1 mandates that every SEA include: the seafarer’s full name, date of birth, and birthplace; the shipowner’s name and address; the place and date the agreement was entered into; the capacity in which the seafarer is employed; the amount of wages or applicable formula; the amount of paid annual leave or applicable formula; termination conditions including notice periods; health and social security protection benefits; and the seafarer’s entitlement to repatriation.

Beyond the Minimum

Well-drafted SEAs address areas the Convention leaves to the parties. Confidentiality provisions are particularly relevant in the superyacht context, where crew have access to the principal’s private life, business activities, and family matters. Non-disclosure obligations must be carefully balanced against crew rights—they cannot be so broad as to prevent crew from reporting safety concerns or seeking legal advice regarding their employment conditions.

Rotational arrangements, which are standard in superyacht crewing, require precise documentation. A crew member working a 2:1 rotation (two months on, one month off) needs an SEA that clearly addresses leave accrual, travel arrangements for crew changes, and the employment status during leave periods. Ambiguity in rotational terms generates the majority of crew employment disputes in the superyacht sector.

Gratuity and tip-sharing arrangements, while not addressed by MLC 2006, represent a significant component of crew compensation in the charter yacht market. Whether gratuities form part of contractual entitlement or remain discretionary has substantial implications for termination payments, leave calculations, and social security contributions.

Hours of Work and Rest

MLC Regulation 2.3 establishes maximum hours of work (14 hours in any 24-hour period, 72 hours in any seven-day period) or minimum hours of rest (10 hours in any 24-hour period, 77 hours in any seven-day period). Flag states choose which standard to implement.

Compliance with hours of rest requirements presents particular challenges in the superyacht sector. A vessel operating on charter with a small crew may find that guest service demands, passage-making requirements, and port arrival preparations create sustained periods where rest hour compliance is technically difficult.

The record-keeping obligation is equally important. Hours of work and rest records must be maintained, signed by both the seafarer and the master, and available for inspection. Port state control officers examine these records routinely. Patterns showing consistent minimum-rest compliance without exception tend to attract scrutiny rather than satisfy inspectors—they suggest the records may not reflect actual working patterns.

The Practical Approach

Operators managing hours of rest compliance effectively tend to adopt several strategies. Crewing levels are set with rest hour compliance factored into operational planning, not treated as an afterthought. Watch systems are documented and realistic. Where exceptional circumstances require deviation from rest hour requirements—which the Convention permits for safety of the vessel or persons aboard—deviations are recorded contemporaneously with the reason documented.

The distinction between ‘on call’ and ‘at rest’ requires particular attention aboard yachts. A crew member nominally off-duty but required to respond to guest requests is not at rest for MLC purposes. Operational policies that clearly delineate when crew are genuinely at rest—and protect that rest from interruption except in genuine emergencies—are both a compliance requirement and a crew welfare imperative.

Flag State Variations

While MLC 2006 establishes the baseline, flag state implementation introduces significant variation. The flag under which a vessel operates determines not only which MLC provisions apply in detail but also the certification requirements, inspection regime, and enforcement approach.

Red Ensign Group

The Red Ensign Group registries (Cayman Islands, Isle of Man, Gibraltar, Bermuda, and others) have implemented MLC through national legislation that generally exceeds Convention minimums. The Cayman Islands Maritime Authority, for example, requires Maritime Labour Certificates for yachts of 500 GT and above in commercial use, with Declaration of Maritime Labour Compliance setting out the measures adopted by the shipowner.

Red Ensign Group harmonisation efforts mean that compliance standards are broadly consistent across member registries, though specific documentation requirements vary. Vessels changing between Red Ensign flags may find the transition relatively straightforward compared to moving between unrelated flag states.

Malta

As an EU flag state, Malta implements MLC 2006 alongside EU Directive 2009/13/EC, which gives effect to the social partners’ agreement on the Convention. Maltese implementation includes specific requirements for yacht crew that reflect the registry’s significant superyacht fleet. The Merchant Shipping (Maritime Labour Convention) Rules set out detailed provisions for SEAs, wages, hours of rest, and repatriation.

Marshall Islands

The Marshall Islands Maritime Administrator has implemented MLC requirements through Maritime Regulations. Vessels of 500 GT and above require Maritime Labour Certificates. The Marshall Islands approach emphasises practical compliance supported by an extensive network of recognised organisations authorised to conduct inspections and issue certificates on behalf of the flag.

Port State Control

Port state control (PSC) represents the enforcement mechanism that gives MLC 2006 practical teeth. Under the Convention’s ‘no more favourable treatment’ clause, port states must apply MLC requirements to all vessels calling at their ports, including those flagged in states that have not ratified the Convention.

PSC officers may inspect any vessel for MLC compliance. Initial inspections examine documentation: Maritime Labour Certificate, Declaration of Maritime Labour Compliance, SEAs, hours of rest records, and evidence of complaint procedures. Where documentation raises concerns, more detailed inspections follow.

Deficiency Patterns

Analysis of PSC inspection data reveals consistent patterns in MLC-related deficiencies. The most frequently cited categories include: incomplete or missing SEAs, hours of rest record-keeping failures, inadequate food and catering arrangements, medical certificate deficiencies, and insufficient complaint procedures documentation.

For superyachts, the most common PSC encounter occurs during routine port checks in Mediterranean and Caribbean charter destinations. Officers increasingly examine crew employment documentation as standard practice, even for vessels not technically requiring MLC certification. The practical advice: maintain compliant documentation regardless of technical obligation.

Emerging Compliance Intersections

Crew employment compliance is increasingly intersecting with other regulatory frameworks in ways that create compound obligations for vessel operators.

AML/CTF and Crew Screening

As AML/CTF frameworks expand to cover maritime service providers—including under Australia’s Tranche 2 reforms taking effect July 2026—crew employment processes are becoming relevant to broader compliance obligations. Crew recruitment agencies, management companies, and operators increasingly face know-your-customer obligations that extend to personnel verification.

Sanctions screening of crew members is becoming standard practice among well-advised operators. A crew member holding citizenship or residency in a sanctioned jurisdiction creates compliance considerations that extend beyond employment law into sanctions compliance, banking requirements, and insurance coverage.

Tax and Social Security

Crew employment structures face increasing scrutiny from tax authorities. The traditional assumption that seafarers working aboard internationally-trading vessels fall outside domestic tax obligations is being challenged across multiple jurisdictions. Australia, the UK, and several EU member states have clarified or expanded the circumstances under which crew aboard yachts may create domestic tax obligations for either the crew member or the employer.

Social security obligations present similar complexity. The applicable legislation depends on the flag state, the crew member’s nationality and residence, the vessel’s operational patterns, and bilateral or multilateral social security agreements. Multinational crew aboard a vessel changing operational areas can create shifting social security obligations that require ongoing monitoring.

Data Protection

Crew employment records contain personal data subject to data protection regulation. Where crew are EU/EEA nationals or the vessel operates within EU waters, GDPR applies to the processing of crew employment data. This intersects with MLC record-keeping requirements—operators must maintain employment records while complying with data minimisation principles and crew members’ data subject rights.

Practical Compliance Framework

Operators managing crew employment compliance effectively tend to adopt a structured approach that addresses both the documented requirements and the operational reality:

• SEA templates reviewed against current flag state requirements, not simply recycled from previous years or other vessels
• Hours of rest recording systems that capture actual working patterns, with crew trained on accurate record-keeping
• Crew change procedures that include document verification, medical certificate currency, and certification validity checks
• Grievance and complaint procedures documented, communicated to crew, and genuinely accessible
• Rotational planning that builds rest hour compliance into operational scheduling rather than treating it as a post-hoc exercise
• Regular internal audits comparing documented procedures against actual practice

The distinction between operators who experience compliance difficulties and those who navigate inspections smoothly tends to correlate less with the sophistication of their documentation and more with the alignment between what the documents say and how the vessel actually operates.

The 2026 Landscape

Several developments are shaping the crew employment compliance landscape in 2026. The ILO’s Special Tripartite Committee continues to consider amendments to MLC 2006, with particular attention to technology’s impact on working conditions and the adequacy of social security provisions for internationally mobile seafarers.

Port state control regimes are expanding their MLC inspection capabilities, with Mediterranean and Caribbean PSC authorities—the regions most relevant to superyacht operations—increasing the frequency and depth of crew employment documentation reviews.

The convergence of MLC compliance with AML/CTF frameworks, sanctions screening, and beneficial ownership transparency is creating a compliance environment where crew employment cannot be managed in isolation from the vessel’s broader regulatory position.

For yacht management companies, the implication is clear: crew employment compliance is no longer solely an HR function. It intersects with legal, compliance, and regulatory obligations that require coordinated management across disciplines.

Intelligence Division

This analysis provides a framework for understanding the current MLC compliance landscape and its intersection with broader maritime regulatory developments. Specific vessel configurations, flag state requirements, and operational patterns create unique compliance profiles that require tailored analysis.

Indo-Pacific Solutions’ Intelligence Division provides monthly briefings on regulatory developments affecting crew employment and vessel operations. Segment-specific analysis is available for:

• Yacht Management companies
• Brokerage professionals
• Family Office executives
• Port Agency operations
• General Counsel
• Industry professionals

Each segment receives tailored ‘So What’ analysis translating regulatory developments into practical implications for their specific role and responsibilities.