Sri Lanka

Labor Compliance Guide

Labor Requirements

The Labor Law in Sri Lanka is governed by the Shop and Office Employees Act, 1956, the Factory Ordinance, the Minimum Wage Ordinance, the Maternity Benefits Ordinance, etc.

 

Under Shop and Office Employees Act, “office” means any establishment maintained for the purpose of the transaction of the business of any bank, broker, the insurance company, shipping company, joint-stock or other company, estate agent, advertising agent, commission agent, or forwarding or indenting agent. Shop constitutes any premises in which any retail or wholesale business is carried on, and includes a residential hotel and any place where the business of the sale of articles of food or drink or the business of a barber or hairdresser or any other prescribed trade or business is carried on. It does not include factory workers.

Hours & Pay Regulations

Normal Working Hours

The normal working hours of a regular employee shall not exceed 8 hours per day. In any one week, working hours shall not exceed 45 hours.

 

Week means the period between midnight on any Saturday night and midnight on the succeeding Saturday night. An employer may not require an employee to have more than 12 hours to lapse between the time at which any person commences work or any day and the time at which he ceases work on that day. 

 

No male who has not attained the age of 18 years and no female shall be employed in or about the business of any shop or office for any period (including overtime and an interval for rest or for a meal) exceeding 9 hours a day. 

 

The daily hours limit does not apply to any person who holds an executive or managerial position in a public institution and who is in receipt of a consolidated salary the initial of the scale of which is not less than Rs.6,720 per annum. Shop and the Office Employees Act, 1956, Sec 3.

 

Recording Requirement

Every employer shall maintain in respect of each employee a service record substantially in Form F of the Schedule hereto, and a remuneration record containing the following particulars, for each period (month, fortnight, or a week, as the case may be, hereinafter referred to as the remuneration period) in respect of which remuneration is paid:-

      • Remuneration period (month, fortnight, or week); 
      • The number of hours of work performed during the remuneration period; 
      • The number of hours of overtime work performed during the remuneration period; (i) Rate of remuneration payable; 
      • Allowances payable (each allowance to be shown separately); 
      • Gross remuneration earned for the remuneration period; 
      • All deductions made from the gross remuneration (each deduction to be shown separately);
      • All advances made out of the remuneration during the remuneration period;
      • Contributions made by the employer and employee respectively in respect of the remuneration period, to any pension or provident fund; 
      • The amount of balance remuneration paid and the date of payment;
      • The total amount of overtime remuneration paid in respect of each remuneration period; 

Every record shall be kept up to date by the employer and shall be preserved by the employer for a minimum period of four years.

Shop and the Office Employees Act, 1956, Sec 17

Overtime

Overtime in relation to any employment or work means employment or work in excess of the normal working hours. Overtime shall not exceed an aggregate of 12 hours in any one week. 

 

Pay – No employee is required to work overtime, unless he is paid separately for such overtime work in respect of each hour, at a rate not less than 1.5 times the hourly rate of his ordinary remuneration. The remuneration payable for any part of an hour of overtime work done by him shall be determined in the proportion that part bears to the hour.

 

The hourly rate of remuneration for the purpose of computing overtime remuneration shall be as follows –  

      • where remuneration is payable at a daily rate, be one-eighth of the daily rate,
      • where remuneration is payable at a monthly rate, be one-eighth of the monthly rate divided by thirty, 
      • where remuneration is payable at a fortnightly rate, be one-eighth of the monthly rate divided by fourteen, and, 
      • where remuneration is payable at a weekly rate, be one-eighth of the monthly rate divided by seven. 

In order to compute overtime in respect of work done in any week by any employee in excess of the normal maximum period of 45 hours, any day in that week on which such employee was on leave or on holiday, shall be deemed to be a day on which such employee had worked for the normal maximum period fixed for a day. Shop and Office Employees Act, Sec 6-9. 

Night Work

An employee who has attained the age of fourteen years and who is a male, has not attained the age of eighteen years or is a female, shall not be employed in or about the business of a shop or office before 6 a.m. or after 6 p.m. on any day. Shop and Office Employees Act, 1956, Sec 10. 

Breaks

Working hours shall not include any interval allowed for rest or for a meal. A rest break must be given to employees on the days that they work eight hours or more. Employees are not entitled to a rest break on a shorter working day. 

      • If the employee’s working hours in a day constitute the hours between 11 am and 2 pm, the employee will be entitled to a break of 1 hour for a meal or rest break.
      • If the employees working hours in a day constitutes the hours between 4 pm and 6 pm, the employee will be entitled to a break of 30 minutes for meal or rest break
      • If the employee’s working hours in a day constitute the hours between 7 pm and 10 pm, the employee will be entitled to a break of 1 hour for a meal or rest break.

Every employee shall, on each day on which he is so employed, be allowed an interval of 30 minutes for rest or a meal at the termination of each period of 4 hours during which he has been continuously so employed. Shop and the Office Employees Act, 1956, Sec 9 & Schedule to Section 9

 

Weekly Rest Day

Every employee will be allowed one whole holiday and one half-day after for every week. Weekly rest will be allowed with full remuneration if the employee has worked for not less than 28 hours, exclusive of any period of overtime work, during that week. 

The holidays due in respect of any week shall be allowed either in that week or in the week immediately succeeding provided that the holidays so due in respect of any 4 consecutive weeks in any month may instead be, allowed in accumulation at any time in that month  (one full holiday being so allowed in lieu of two half-holidays so due).

 

Half-holiday means a day (as herein-before defined) on which that person is not employed for more than five hours, exclusive of any interval allowed for rest or a meal and any interruption.

Work On Rest Days

Work on Weekly Rest – Any employee who is required to work on a weekly holiday is entitled to payment at the overtime rate, which is calculated at one-and-a-half times the normal daily wage. Shop and the Office Employees Act, 1956, Sec 5. 

Public Holidays

Every employee shall be allowed a holiday with full remuneration on each of such days, being public holidays within the meaning of the Holidays Act, The employee is entitled to 9 Holidays out of the holidays declared by the gazette. Every Full Moon Poya Day and every Sunday shall be a public holiday and a bank holiday. Public Holiday includes – 

    • Tamil Thai Pongal Day
    • Duruthu Full Moon Poya Day
    • Independence Day
    • Navam Full Moon Poya Day
    • Maha Shivaratri Day
    • Madin Full Moon Poya Day
    • Good Friday
    • Day prior to Sinhala and Tamil New Year Day
    • Sinhala and Tamil New Year Day
    • Bak Full Moon Poya Day
    • May Day
    • Id-Ul-Fitr (Ramazan)
    • Vesak Full Moon Poya Day
    • The day following Vesak Full Moon Poya Day
    • Poson Full Moon Poya Day
    • Id-Ul-Alha (Hadji Festival)
    • Esala Full Moon Poya Day
    • Nikini Full Moon Poya Day
    • Binara Full Moon Poya Day
    • Milad-Un-Nabi (Holy Prophet’s Birthday)
    • Vap Full Moon Poya Day
    • Deepavali Festival Day
    • Ill Full Moon Poya Day
    • Unduvap Full Moon Poya Day
    • Christmas Day

If a public holiday falls on a weekly rest day, no additional holiday is granted.

 

Work on Holiday

An employee may be employed on any day declared to be a holiday like a regular workday. In such case, an employee will be provided with a time off on any other day with full remuneration on or before the next 31st of December, or be paid remuneration for his employment on the day at a rate which is two times the rate at which such person is ordinarily remunerated for such employment on any day. 

 

But in case of Full Moon Poya Day falls on a holiday allowed or on a weekly holiday or on a weekly half-holiday, no additional holiday shall be allowed to the employee in lieu of that Full Moon Poya Day. An employee may be employed on a Full Moon Poya Day for a normal period of employment subject to the condition that he shall be paid not less than one and a half times his normal daily rate of remuneration. Shop and Office Employees Act, Sec 6-9. 

Annual Leave

During the first year of employment during which an employee has been continuously in employment that person shall be entitled to take –

      • where the employment commences on or after the first day of January but before the first day of April, a holiday of 14 days with full remuneration;
      • where the employment commences on or after the first day of April but before the first day of July, a holiday of 10 days with full remuneration;
      • where the employment commences on or after the first day of July but before the first day of October, a holiday of 7 days with full remuneration; and
      • where the employment commences on or after the first day of October a holiday of 4 days with full remuneration, and the employer shall allow such holiday and be liable to pay such remuneration.

For the second or any subsequent year of employment during which an employee has been continuously in employment, that employment shall be entitled to take a holiday of 14 calendar days with full remuneration, of which not less than 7 days shall be consecutive days, and the employer shall allow such holiday and be liable to pay such remuneration. 

 

An employee’s annual leave entitlement must be taken in the year immediately succeeding the year to which the entitlement relates, on days to be agreed upon by the employer and the employee. Any absence due to holiday or leave with full remuneration will be considered as days worked for the purpose of continuity of employment of any employee.

 

In case a person is terminated without notice the employer shall pay full remuneration.

 

Where an employee is entitled to and has been allowed annual leave or sick leave and any such annual leave or sick leave falls on a day on which the employee is entitled to any weekly rest day or public holiday, then, such employee shall be allowed the weekly rest or public holiday which he is entitled, as the case may be, in addition to the annual leave or sick leave which has already been allowed to that employee. Shop and the Office Employees Act, 1956, Sec 6, 51. 

Minimum Wage

The current minimum wage of Sri Lanka is 10,000 LKR/month.

Special Leave

Sick Leave

In respect of each year of employment during which any person has been continuously in employment in or about the business of any shop or office, that person shall be entitled to take on account of private business, ill-health, or other reasonable cause, leave with full remuneration for a period or an aggregate of periods not exceeding seven days per year, and the employer shall allow such leave and be liable to pay such remuneration.

 

The leave to which a person is entitled in respect of the first year of his employment may be taken in that year and shall be computed on the basis of 1 day for each complete period of two month’s service. The leave to which a person is entitled in respect of the second or any subsequent year of his employment may be taken in such a year of employment. Shop and Office Employees Act, 1956, Sec 6.

Maternity Benefit Leave

The duration of maternity leave is 12 weeks (84 days) excluding weekly holidays, Poya days, and statutory holidays. Out of these 12 weeks, 2 weeks maternity leave is before confinement (including the day of her confinement) and 10 weeks following the day of confinement, and 6 weeks in case of the birth of a stillborn child, irrespective of a prior number of children. In the case of the shop and office workers, the leave is reduced to 28 days if the confinement does not result in the delivery of a live child.

 

The entitlement to twelve weeks’ paid leave is regardless of the number of children the employee has at the time of the confinement. If a woman employee passes away during her maternity leave, the leave-in respect of which the payment is to be made by the employer is only up to and including the date of death.

 

Pay – Maternity Leave under the Shop and Office Employees Act is fully paid leave while under the Maternity Benefits Ordinance, 6/7th (86%) of a worker’s wages are paid for the period.

 

Maternity benefits are provided to a woman who has worked at least one hundred and fifty days within the period of one year, under the employer from whom she claims such benefit, immediately preceding the date of the notice that women may give to the employer before confinement.  Maternity Benefits (Amendment) Act, (No. 15 of 2018), Section 2.

 

Breast Feeding Break

Maternity Benefits Ordinance provides for two paid breaks, each of at least 30-minute duration during nine hours of the working day, till the child is one year old.

 

The employer should provide nursing facilities to the workers for nursing their children. The duration of each nursing break is 30 minutes if a creche or other suitable place is provided by the employer; otherwise, it would not be less than one hour. Nursing breaks are provided in addition to the meal or rest break provided and they are regarded as time worked.

Last updated on: April 7th, 2021