Local Employment Laws and Regulations in Sri Lanka

Overview

Sri Lanka, officially the Democratic Socialist Republic of Sri Lanka, is a country in South Asia. Known for its stunning beaches, diverse culture, and rich history, Sri Lanka is a popular destination for tourism and cultural exploration. From the bustling streets of Colombo to the serene landscapes of Kandy, Sri Lanka offers a wealth of cultural and natural attractions.

Sri Lanka's economy is diverse, with key sectors including manufacturing, services, and agriculture. The country is a major exporter of garments, tea, and rubber. Sri Lanka's growing economy and improving infrastructure make it an attractive destination for foreign investment.

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Local Employment Regulations

Last updated on March, 22nd, 2023

Employment Contracts

Employment contracts in Sri Lanka can be written, oral, or implied. Written employment contracts are signed by both the employer and the employee in a language well understood by the employee. Employees that work in an office or shop must be provided the following information in writing:

name and designation of the employee,
type of appointment,
date of appointment,
payment terms, wages and bonuses,
employment conditions,
working hours and leave, and
termination terms.

Employment contracts in Sri Lanka can be for a fixed or indefinite term.

Working Hours

The standard work week in Sri Lanka is capped at 45 hours with eight hours a day, Monday through Friday. Overtime is capped at 12 hours a week and is paid at 150% of the basic rate. Male employees between the ages of 14 and 18 generally cannot work at night, which is between the hours of 6 p.m. and 6 a.m. However, male employees between the ages of 16 and 18 can work between the hours of 6 a.m. and 10 p.m. if working in a hotel, restaurant, or place of entertainment. Female employees also are prohibited from working at night, with a few exceptions. Female employees who are at least 18 years old may work in a residential hotel or restaurant between 6 p.m. and 10 p.m., or in an office between 6 p.m. and 8 p.m.

Public Holidays

In Sri Lanka, the public holidays are:

Duruthu Full Moon Poya Day
Tamil Thai Pongal Day
Sri Lanka National Day
Navam Full Moon Poya Day
Mahasivarathri Day
Madin Full Moon Poya Day
Good Friday
Bak Full Moon Poya Day
Sinhala & Tamil New Year's Eve
Sinhala & Tamil New Year's Day
May Day (Labor Day)
Id-Ul-Fitr (Ramazan Festival Day)
Vesak Full Moon Poya Day
Day following Vesak Full Moon Poya Day
Poson Full Moon Poya Day
Id-Ul-Alha (Hadji Festival Day)
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
Ill Full Moon Poya Day
Unduvap Full Moon Poya Day
Christmas Day

Employment Termination/Severance

Employment contracts may be terminated in Sri Lanka at the end of the contract term (if for a fixed term), by the employer or by the employee. Employers can dismiss an employee for misconduct, disciplinary reasons or poor performance. Employers must notify employees in writing of the reason for dismissal no later than two days after the termination. Justifiable grounds for terminating an employee include:

gross negligence,
abusive or insubordinate behavior,
fraud, theft or dishonesty,
intoxication or other impairment, and
abandonment or frequent absenteeism.

Termination of an employee for any reason other than for disciplinary reasons, including redundancy, generally must be approved by the Labor Commissioner or consented to by the employee.

Compensation

Employers failing to pay the minimum wage in Sri Lanka can face sanctions from the government. Overtime pay is paid at a percentage of the employee’s normal wages. There is no requirement in Sri Lanka for employers to provide bonuses.

Population 21.9m

19.4%

Urban Population

51.2%

Internet access

81.7%

Banking access

100%

Mobile phone access

DATA SOURCES

Population: The World Bank: World Development Indicators: World Bank Group • World Population Prospects, United Nations (UN), uri: https://population.un.org/wpp/, publisher: UN Population Division; Statistical databases and publications from national statistical offices, National Statistical Offices, uri: https://unstats.un.org/home/nso_sites/, publisher: National Statistical Offices; Eurostat: Demographic Statistics, Eurostat (ESTAT), uri: https://ec.europa.eu/eurostat/data/database?node_code=earn_ses_monthly, publisher: Eurostat; Population and Vital Statistics Report (various years), United Nations (UN), uri: https://unstats.un.org, publisher: UN Statistics Division

Urban Population: The World Bank: World Development Indicators: World Bank Group • World Urbanization Prospects, United Nations (UN), uri: https://population.un.org/wup/, publisher: UN Population Division

Internet access: The World Bank: World Development Indicators: World Bank Group • World Telecommunication/ICT Indicators Database, ITU (ITU), uri: https://datahub.itu.int/

Banking access: The World Bank: World Development Indicators: World Bank Group • FINDEX, WBG (WB), uri: https://www.worldbank.org/en/publication/globalfindex

Mobile phone access: The World Bank: World Development Indicators: World Bank Group • World Telecommunication/ICT Indicators Database, ITU (ITU)

Social Protection & Benefits

Last updated on March, 22nd, 2023

Vacation Leave

Employees in Sri Lanka receive 14 days of paid leave annually after one year of service. Employees with less than one year of service are entitled to between four and 10 days of leave as follows:

10 days if employment starts on or after the first day of April but before the first day of July,
seven days if employment starts on or after the first day of July but before the first day of October, or
four days if employment starts on or after the first day of October but before the end of December.

Employees must take a minimum of seven consecutive days of annual leave at once and within 12 months of accrual. The specific dates on which leave may be taken is a matter agreed upon between the employer and employee.

Sick Leave

Employees receive up to seven days a year of sick leave in Sri Lanka. In the first year of employment, sick leave is accrued at a rate of one day every two months.

Maternity/Paternity Leave

Female employees receive 12 weeks of paid maternity leave in Sri Lanka. Up to two weeks can be taken before the expected due date and the remaining 10 weeks taken after the birth. If the pregnancy does not result in a live birth, the employee is entitled to six weeks of leave, with two to be taken before the expected due date and four weeks taken after. Maternity benefits for the period leading up to and including the date of confinement must be paid by the employer within 48 hours of the employee providing proof of the pregnancy. Payment for the period after the birth are paid in two installments in the second and fourth week of leave.

Health Insurance Benefits

Sri Lanka has a universal public healthcare system . Some private employers offer additional health insurance plans.

Unemployment 5%

49.7%

Labor force population share

33.2%

Female share of labor force

67%

Healthcare access

DATA SOURCES

Unemployment: The World Bank: World Development Indicators: World Bank Group • ILO Modelled Estimates database (ILOEST), ILO (ILO), uri: https://ilostat.ilo.org/data/bulk/, publisher: ILOSTAT, type: external database, date accessed: January 07, 2025.

Labor force (total): The World Bank: World Development Indicators: World Bank Group • ILO (ILO), type: estimates based on external database; United Nations (UN), publisher: UN Population Division; Staff estimates, WBG (WB)

Labor force population share: The World Bank: World Development Indicators: World Bank Group • ILO Modelled Estimates database (ILOEST), ILO (ILO), uri: https://ilostat.ilo.org/data/bulk/, publisher: ILOSTAT, type: external database, date accessed: January 07, 2025

Female share of labor force: The World Bank: World Development Indicators: World Bank Group • ILO (ILO), type: estimates based on external database; United Nations (UN), publisher: UN Population Division; Staff estimates, WBG (WB)

Healthcare access: The World Bank: World Development Indicators: World Bank Group • GHO, WHO (WHO), uri: https://www.who.int/data/gho/data/themes/topics/service-coverage

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