The Democratic Socialist Republic of Sri Lanka (formerly Ceylon) lies in the Indian Ocean, southwest of the Bay of Bengal, and southeast of the Arabian Sea. The island country is separated from the Indian subcontinent by the Gulf of Mannar and the Palk Strait. It covers 65,600 square kilometers largely made up of coastal plains in the north, and hills and mountains in the south-central interior. The main industries are the processing of agricultural produce largely rubber, tea, coconuts, and tobacco. Sri Lanka’s top trading partners are India, China, and the United States. A leading tea producer and exporter, Sri Lanka also exports apparel, coffee, and spices. The services sector is the leading employer (46%), followed by industry (30%), and agriculture (24%).

 

*Please note that the official currency is the currency of remuneration when employed through WorkMotion in Sri Lanka.

Capital :
Executive and Judicial Capital: Colombo Legislative Capital: Sri Jayawardenepura Kotte.
Currency :
Sri Lankan rupee (Rs, LKR)
Languages spoken :
Sinhala, Tamil
Population :
21.92 million (2020 est.)
Minimum wage 2022 :
LKR 16,000 per month
Cost of Living index :
$$ (119 of 139 countries)
Payroll Frequency :
Monthly
VAT - standard rate :
8%
GDP - real growth rate :
3.6% (2021 est.)

Statutory Holidays

Date
Holiday Name
Extra Information
January 14
Tamil Thai Pongal Day
January 17
Duruthu Full Moon Poya Day
Movable
February 4
National Day
February 16
Navam Full Moon Poya Day
Movable
March 1
Mahasivarathri Day
Movable
March 17
Madin Full Moon Poya Day
Movable
April 13 -14
Sinhala & Tamil New Year Holiday
Movable
April 15
Good Friday
Movable
April 16
Bak Full Moon Poya Day
Movable
May 1
May Day
May 3
Id Ul-Fitr
Movable
May 15
Vesak Full Moon Poya Day
Movable
May 16
Day following Vesak Full Moon Poya Day
Movable
June 14
Poson Full Moon Poya Day
Movable
July 10
Id Ul-Alha
Movable
July 13
Esala Full Moon Poya Day
Movable
August 11
Nikini Full Moon Poya Day
Movable
September 10
Binara Full Moon Poya Day
Movable
October 9
Milad un-Nabi
Movable
October 9
October 9 Vap Full Moon Poya Day
Movable
October 24
Deepavali
Movable
November 7
Ill Full Moon Poya Day
Movable
December 7
Unduvap Full Moon Poya Day
Movable
December 25
December 25 Christmas Day

Onboarding Time


When hiring new employees in Sri Lanka through WorkMotion, the approximate onboarding time is only 6 business days. This time may be affected for events beyond our control at present.

 

Our team ensures compliance with local employment legislation, as well as a quick and efficient onboarding process. The minimum onboarding time begins from the moment that WorkMotion has received all required information from both the client and the employee. 

 

For more complex onboardings, this time may increase depending on the selected bouquet of contract inclusions and the right-to-work status of the employee.

What You Need To Know


  • The law does not deal with notice periods relating to individual dismissals. Notice periods for individual dismissals must be stipulated in the contract of employment.
  • The labor laws do not provide a statutory provision for the duration of the probationary period.
  • There is no statutory provision for parental leave and paternity leave.

Labor Conditions


Working Hours

The normal working hours are eight hours per day and are not to exceed 45 hours per week. One-hour rest breaks must be given between the hours of 11.00am and 2.00pm where employees work during the daytime.

 

Overtime

Overtime is not to exceed 12 hours in any one week. Overtime pay is 150% of the rate of ordinary pay.

Probation Period

There is no legislated probation period. The Act provides for the employer to clearly state the probation period, the terms governing it, and the circumstances under which the employee may be terminated during the probation period. In practice, probation periods are six months to a year.

 

Termination Notice Period

There is no statutory notice period for individual dismissals. Individual notice periods, or payments in lieu of notice for dismissal, are stipulated in the contract of employment.

For collective dismissals, at least one month’s prior notice applies prior to retrenching employees that have served the employer for at least one year.

Leave / Time Off

Annual Leave

During the first year, an employee accumulates the following annual leave depending upon the time of commencement of their contract of employment:

Employment CommencementLeave Entitlement
On or after January 1 but before April 114 days
On or after April 1 but before July 110 days
On or after July 1 but before October 17 days
On or after October 1 but before December 314 days

From the second year of employment onward, after completing 12 months of continuous service, an employee is entitled to 14 days of paid annual leave, of which not less than seven must be consecutive days.

Sick Leave

A person who has completed a year of continuous service is entitled to sick leave of not more than seven days with full remuneration. The employer is responsible for paying  the employee during sick leave.

Parental Leave

There is no statutory provision for parental leave.

 

Maternity Leave

A female employee is entitled to 12 weeks of maternity leave, two weeks before and 10 weeks immediately after confinement if the confinement results in the issue of a live child.

If the confinement does not result in the issue of a live child, the employee is entitled to four weeks’ leave after confinement. 

 

Paternity Leave

There is no statutory provision for paternity leave.

Other Types of Paid Leave

Casual leave

An employee that has been with the employer for 12 months is entitled to seven days of casual leave in a 12 month period. Casual leave is normally availed from one-half day to one or more days at a time. The leave is taken on account of private business, ill-health, or other reasonable cause.

Unpaid Leave

There is no statutory provision for unpaid leave in Sri Lanka.

Statutory Benefits

 

BenefitEmployer Contributions
Employees Provident Fund12%
Employees Trust Fund3%
Social security contribution on annual turnover exceeding LKR 120 million2.5% (effected from April 1, 2022)

Health Insurance

Access to health services in Sri Lanka is through two programs:

  • The universal system, which offers medical benefits, is available for all citizens free of charge through the Shramasuwa Rekawarana Hospitalization Medical Scheme, and has no minimum qualifying period;
  • The employer-liability system, which offers cash benefits, requires an employee to have at least 12 months of continuous employment with the same employer and to provide a medical certificate. An employee receives 100% of their normal earnings for up to seven days a year.

The employer contributes 3% of each employee’s salary (representing the total cost) to the Employees Trust Fund monthly before the last working day of the following month to enable members to access medical benefits.

Other Insurances

Accident Insurance

 

Liability for work-related accidents rests with the employer. The total cost through either providing benefits directly to employees or paying insurance premiums ranges from 1% to 7.5% of payroll, depending on the assessed degree of risk.

Unemployment Insurance

 

Under the present social security scheme, there is no protection against unemployment.

Public Pension

The retirement age is 60 years as per the Minimum Retirement Age of Workers Act. The old-age pension is operated under a Provident Fund and Trust Fund system.

The employer contributes 12% of monthly payroll towards the Provident Fund and 3% of monthly payroll towards the Trust Fund.

Disclaimer

The information contained in this Country Guide is provided for informational purposes only and should not be construed as legal advice on any subject matter. The contents of this Country Guide contain general information and may not reflect current legal developments or address your situation. You should not act or refrain from acting on the basis of any content included in this Country Guide without seeking the advice or representation of a licensed attorney. WorkMotion Software GmbH disclaims all liability for actions you take or fail to take based on any content included in this Country Guide.

Information provided in this Country Guide is provided “as is” without warranty of any kind, either express or implied, including without limitation warranties of merchantability, fitness for a particular purpose, or non-infringement. WorkMotion Software GmbH periodically adds, changes, improves, updates, or removes information without notice, and assumes no liability or responsibility for any errors or omissions in the contents of this Country Guide. This Country Guide may contain links to other websites. WorkMotion Software GmbH disclaims all liability for the privacy practices or the content of such websites.

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