Employment and labor laws vary from country to country. This guide is intended to provide the most up to date information available. We will update this guide as needed when changes are made to the laws.
Employment Contracts
Employers are legally required to provide formal written contracts for all employees that include salary/wage, termination terms, job title, etc. The contracts must be written in Sinhala and use the Sri Lankan Rupee currency (LKR).
Working Hours
Standard working hours within Sri Lanka are 8 hours per day, 45 hours per week. There are some industry-specific regulations, for example, according to Section 73 of the Factories Ordinance, a young person shall not be employed in a factory on a Sunday.
Overtime
Overtime is paid at 150.00% of the standard salary rate. A maximum of 12 overtime hours can be worked in a week. Executive/professional positions might be exempt from overtime restrictions.
Public Holidays
Public holidays that fall on the weekend are usually lost.
For the year 2024:
- 15 Jan: Tamil Thai Pongal Day
- 25 Jan: Duruthu Full Moon Poya Day
- 4 Feb: National Day
- 23 Feb: Navam Full Moon Poya Day
- 8 Mar: Mahasivarathri Day
- 24 Mar: Madin Full Moon Poya Day
- 29 Mar: Good Friday
- 11 Apr: Eid al-Fitr (Tentative)
- 12 Apr: Sinhala and Tamil New Year’s Eve
- 13 Apr: Sinhala and Tamil New Year’s Day
- 23 Apr: Bak Full Moon Poya Day
- 1 May: May Day
- 23 May: Vesak Full Moon Poya Day
- 24 May: Day after Vesak Full Moon Poya Day
- 17 Jun: Eid al-Adha (Tentative)
- 21 Jun: Poson Full Moon Poya Day
- 20 Jul: Esala Full Moon Poya Day
- 19 Aug: Nikini Full Moon Poya Day
- 16 Sep: Milad-Un-Nabi (Holy Prophet’s Birthday) (Tentative)
- 17 Sep: Binara Full Moon Poya Day
- 17 Oct: Vap Full Moon Poya Day
- 31 Oct: Deepavali
- 15 Nov: Ill Full Moon Poya Day
- 14 Dec: Unduvap Full Moon Poya Day
- 25 Dec: Christmas Day
Annual Leave (vacation)
Paid leave in Sri Lanka is outlined in the employment contract as a minimum of 14 days paid leave a year following completion of 1-year service, in addition to public holidays. Within the first 12 months, leave entitlement starts at 4 days after the probation period and accumulates every quarter. Carryover over unused leave is per company policy.
Sick Days
In all cases, sick leave applications must be supported by a medical certificate issued by a registered medical practitioner. In general, an employee who has completed a year of continuous service in the public or private sector is entitled to 100% paid sick leave of no more than seven days per year.
Maternity Leave
All female employees are entitled to a maternity leave of 12 weeks (84 days) excluding weekly holidays, Poya days, and statutory holidays for the birth of the first and second children. This is based on 14 days prior to the birth and 70 days after the birth. This is reduced to 6 weeks (42 days) for the third and any subsequent children, based on 14 days prior to the birth and 28 days after the birth.
Paternity Leave
The father is entitled to mandatory paid paternity leave of a total of 3 days for the state sector only and the leave must be taken within 3 months of the birth.
Parental Leave
There are no provisions in the law regarding parental leave.
Other Leave
In Sri Lanka an employee can be granted duty leave to:
- Take part in the reserve list of a volunteer unit of the armed forces
- Attend exams for language proficiency
- Attend medical examinations
- Vote for elections
Employee Severance and Terminations
Termination Process
Employers can terminate a fix-term contract by giving the following reasons – business, personal, or employees misconduct. It requires notice and a written explanation for the termination.
Employers are required to pay a half month’s salary for each year of completion if the employee’s service period exceeds five years at the time of retirement, resignation, or retrenchment.
Concessionary tax rates apply to sums paid to an employee on cessation of employment when the scheme is uniformly applicable to all employees by way of compensation, commuted pension, retirement gratuity, and contributions to the Employees’ Trust Fund. Accumulated employer’s contribution to an approved or regulated provident fund when withdrawn, is exempt from tax.
Notice Period
The minimum statutory notice period is determined within the job role and respective contract/agreement, however, general notice periods are for a maximum of six months.
Severance Pay
Employers are required to pay a half month’s salary for each year of completion if the employee’s service exceeds 5 years at the time of retirement, resignation, or dismissal.
Probation Period
There is no clear provision in labor laws on the duration of the probation period in Sri Lanka. Generally, the probation period is six months, however, it cannot be for longer than one year for senior employees or six months for other employees (in some cases the maximum limit on a probationary period is three months).
Payroll Cycle
The typical payroll cycle in Sri Lanka can be daily, weekly, fortnightly, or on a monthly basis. The minimum wage in Sri Lanka is 12,500 LKR per month, 500 LKR per day.
13th Salary
There is no statutory requirement to provide a 13th salary.
Employer Payroll Contributions
VISA
All foreign nationals must obtain visas to enter Sri Lanka. Foreign nationals intending to work in Sri Lanka should obtain residence visas and work permits. Residence visas are issued for one year and renewable annually. Applicants for residence visas should obtain entry permits from Sri Lankan missions in their home countries and submit applications within one month after arrival in Sri Lanka under entry visas. The approval of the relevant ministry that governs a particular activity or the BOI, as applicable, is critical in obtaining a residence visa.
Employers are responsible for applying for residence visas for expatriate staff. The Resident Guest Scheme is open to any foreign investor or foreign professional who wishes to contribute to the economic and sociocultural enrichment of Sri Lanka. Five-year visas are issued to individuals qualifying under the scheme. Individuals applying for visas under the Resident Guest Scheme must undergo a medical examination prior to the visas’ confirmation.
VAT
The standard rate of VAT in Sri Lanka is 8% (with a current proposal to increase to 12%).