Hire in Sri Lanka
Country Overview
Employment Contracts
Working Hours
Employee Leave
Employee Benefits
Sri Lanka PEO & Employer of Record Services
Global PEO Services (GPS) helps companies hire employees in Sri Lanka without establishing a legal entity. All human resources, benefits, payroll, and tax needs for the employees are managed by the Global PEO, while the new hires and headquarter teams focus on your business goals.
When hiring employees in Sri Lanka, establishing a subsidiary or branch office is not always the best route, as it’s often a lengthy and expensive process. Hiring via a Professional Employer Organization (PEO), or Employer of Record (EOR), is a faster and often more effective option – especially when starting up in a new country.
Global PEO Services hires the employees on your behalf, legally contracting them through our subsidiary in accordance with Sri Lanka labor laws. As a result, the burden of compliance is on us and the employees can begin work for your company in a matter of days. PEOs/EORs provide you with a streamlined option for hiring employees, testing markets, and responding to growing business needs in Sri Lanka. With Global PEO Services, you get control without taking on legal entity liabilities, contractor risks, or sacrificing on talent or speed to market.
Sri Lanka - Country Overview
Sri Lanka, with a per capita GDP of around $12,811 (Purchasing Power Parity), has a steady annual growth averaging nearly 4.2% compound annual growth over the last 5 years. Major economic sectors include tea export, tourism, textile, apparel, rice, and agricultural products. Sri Lanka has made a notable transition to relative stability and continues to focus on fiscal reforms, improved financial management, increased public and private investment, and better service delivery. Economic transformation and political reconciliation have bolstered competitiveness and long-term development.
Currency
Sri Lankan Rupee
Principal Language
Sinhalese and Tamil
Government
Semi-presidential Representative Democratic Republic
Capital City
Colombo
Major Cities
Dehiwala-Mount Lavinia, Kandy
Employment Contracts in Sri Lanka
The Shop and Office Employees (Regulation of Employment and Remuneration) Act No. 19 of 1954, as amended (SOEA) is a key labor law that regulates work schedules, holidays, and leave entitlement. Though there are no clear provisions in labor laws regarding the duration of probation periods, the usual duration of probation period is 6 months in Sri Lanka.
Working Hours in Sri Lanka
The regular work schedule comprises 8 hours per day and 45 hours in a week. Any work done beyond these schedules is considered overtime and is generally compensated by a minimum of 125% of the regular pay. Employees cannot perform overtime work for more than 12 hours in a week. Overtime does not apply to individuals working in an executive capacity.
Employee Leave in Sri Lanka
Holidays
The following public holidays are observed in Sri Lanka:
- Tamil Thai-Pongal
- National Day
- Milad-Un-Nabi (Holy Prophet’s Birthday)
- Day preceding the Sinhala and Tamil New Year
- Sinhala and Tamil New Year Day
- May Day
- Day after the Vesak Full Moon Poya Day
- Christmas Day
Annual Leave
Employees are entitled to 14 days’ annual leave after completing 1 year of employment. Out of these 14 days, 7 days must be taken on consecutive days.
Maternity Leave
Women employees are entitled to 84 days’ maternity leave for the birth of their 1st or 2nd child. The leave can be taken for 14 days before the expected date of delivery and 70 days after that. For the birth of the 3rd child, employees are entitled to 42 days’ maternity leave out of which 14 days can be taken before the expected date of delivery and 28 days after that.
Casual leave
Employees are entitled to 7 days’ casual leave for ill health and other reasonable causes.
Employee Benefits in Sri Lanka
Old-age Pension
- Old-age Benefit (Provident Fund)
A consolidated amount based on contributions from employees and employers along with accrued interest is paid as an old-age benefit. The interest is paid at 11% per annum. The Monetary Board of the Employees’ Provident Fund adjusts the interest rate periodically which cannot be less than 2.5%. - Old-age Benefit (Trust Fund)
A consolidated amount based on contributions from employees and employers plus accrued interest is paid. The benefit is paid after a 5-year waiting period if an employee changes job.
Permanent Disability Benefits
- Disability Benefit (Provident Fund): A consolidated amount based on contributions from employees and employers plus accrued interest is paid as a disability benefit. The interest is paid at 11% per annum.
The Monetary Board of the Employees’ Provident Fund adjusts the interest rate periodically which cannot be less than 2.5%. - Disability Benefit (Trust Fund): A consolidated amount based on contributions from employees and employers plus accrued interest is paid.
Survivor Benefits
- Survivor Benefit (Provident Fund): A consolidated amount based on contributions from employees and employers plus accrued interest is paid to eligible survivors. The interest is paid at 11% per annum.
The Monetary Board of the Employees’ Provident Fund adjusts the interest rate periodically which cannot be less than 2.5%. - Survivor Benefit (Trust Fund): A consolidated amount based on contributions from employees and employers plus accrued interest is paid.
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