Global HR Compliance in Sri Lanka
Hiring international employees in Sri Lanka can help companies enter the local market or secure cost-effective technical expertise. But navigating local labour regulations is crucial to avoid missteps and delays. Whether you’re building a long-term team or testing the waters, understanding how to legally hire, compensate, and retain workers in Sri Lanka will help ensure your global employment plans are both practical and compliant.
Employment Contracts
Employment contracts in Sri Lanka can be verbal or written, with terms either expressed or implied. However, the Shop and Office Employees (Regulation of Employment and Remuneration) Act requires a written contract that includes key employment terms, such as job title, wages, hours of work, leave entitlements, and probation terms where applicable. Types of employment arrangements include permanent, temporary, fixed-term, seasonal, casual, and probationary contracts, as well as trainee and apprentice schemes.
Working Hours
Standard working hours under the Shop and Office Employees Act are limited to 8 hours per day and 45 hours per week, excluding breaks. The Factories Ordinance restricts women and minors to a maximum of 9 hours per day or 48 hours per week. Employees under 16 may not work more than 12 hours a day and must finish work before 6 p.m.
Probation Period
Probation periods are commonly set at 3 to 6 months but are not mandated by law. If applied, the probation terms—including duration and conditions—must be explicitly stated in the contract or letter of appointment.
Annual Leave and Public Holidays
Employees are entitled to 14 days of annual leave starting from the second year of continuous employment, with at least 7 days taken consecutively. Additional entitlements include 7 days of casual leave, 8 public holidays, and full moon (Poya) days, which are non-working days. Continuous work beyond 4 hours requires a break of at least 30 minutes.
Parental Leave
Female employees covered under the Shop and Office Employees Act are entitled to 84 working days of maternity leave. Those not covered may still be entitled under the Maternity Benefits Ordinance. Currently, there is no statutory provision for paid paternity leave.
Sick Leave
There is no universal statutory sick leave entitlement. Provisions may be set by contract or internal company policy, and may vary depending on the sector.
Overtime
Employees who work a minimum of 28 hours a week must be granted one and a half days off. Overtime pay practices may differ across sectors, though overtime hours and rates should be clearly documented in employment contracts or collective agreements.
Minimum Wage
The national minimum wage is LKR 10,000 per month. Employers must ensure that all employment offers comply with this threshold, which may be revised by the government.
Termination and Notice
Termination rules vary based on contract type, employment duration, and reason for dismissal. For non-disciplinary terminations, the employer must obtain the employee’s written consent or prior written approval from the Commissioner of Labour, if the employee has worked more than 180 days and the company has 15 or more employees on average over the past six months.
For disciplinary terminations, a formal inquiry must be conducted, and the employer must provide a written explanation to the employee within two days of dismissal. Summary dismissals are allowed in cases of gross misconduct but must still follow due process.
Employees may resign at any time with adequate notice. The required notice period should be outlined in the contract. Mutual terminations are permitted and encouraged to be documented in writing to avoid disputes.
How Acumen International Can Help You Hire in Sri Lanka
Direct Employment Without a Local Entity
Acumen International can act as the legal employer of your team in Sri Lanka, allowing you to hire talent quickly without setting up a company. Your workers report to you, but we manage employment on your behalf.
Local Compliance, Centrally Managed
We ensure that employment contracts, compensation structures, terminations, and benefits align with Sri Lankan labour laws. Our expertise helps reduce risk while simplifying HR compliance processes.
Custom Support for Complex Hiring
Need to onboard technical talent or commission-based sales reps? We adapt our service to suit your employment model, industry, and preferred structure.
Global Mobility Support
If you plan to relocate foreign professionals to Sri Lanka, we can guide and facilitate the work permit sponsorship process. This includes helping you understand eligibility, timelines, and documentation while staying compliant with local immigration regulations.
Global Payroll Calculator
Estimate your total employment cost in Sri Lanka using our Global Payroll Calculator. It covers gross-to-net and net-to-gross pay, statutory contributions, and employer costs—useful for budget planning and scenario modelling.
One Partner Across 190+ Countries
Our infrastructure enables you to hire anywhere, not just in Sri Lanka. With unified service delivery across borders, Acumen International simplifies global workforce expansion through a single, dependable partner.