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Minimum Wage in Sri Lanka - Frequently Asked Question

Is there a separate legislation relating to minimum wages in your Sri Lanka?

In Sri Lanka there is Wage Boards Ordinance No. 27 of 1941 of 19 September 1941, as amended up to Act No. 36 of 1982 which regulates minimum wages in the country.

Do one or more minimum wages exist that is/are determined by law?

In Sri Lanka there exist more than one minimum wage rates which apply to employees. Broadly there are 3 types of minimum wages: 1) Minimum wage by occupation: According to section 8, the Minister may publish Gazette and establish a Wage Board for any trade, or any function or process in such trade. 2) Minimum wage by sector- According to section 8, the minister may published Gazette, or establish a Wage Board Ordinance for any trade, or any function or process in such trade. 3) Minimum wage rate for specific categories of workers a) Trainees/Apprenticeship b) Piece-rate workers.

At what level is minimum wages determined in Sri Lanka?

43 wage boards established by the Ministry of Labour Relations and Manpower set minimum wages and working conditions by sector and industry in consultation with unions and employers. The minimum monthly wage in the private sectors covered by wage boards was 6,900 ($62) rupees plus an extra allowance of 1,000 rupees ($9), for a total of 7,900 rupees ($71). The minimum wage in the public sector was 11,730 rupees ($105). Workers in sectors are not covered by wage boards, including informal sector workers, were not covered by any minimum wage. (Ref. http://www.state.gov/documents/organization/160476.pdf)

On what basis is minimum wage calculated?

According to section 22 of Wage Board Ordinance, minimum wage is calculated on daily, hourly, monthly, weekly and piece rate basis.

In case of weekly/monthly minimum age, are they based on any fixed number of hours?

Minimum Wage is based on the fixed number of 48 hours per week.

Are governmental bodies, employer and/or trade union representatives involved in minimum wages setting?

Section 8 of the Wages Board Ordinance mandates the Minister of Labour to establish a Wages Board for any trade to which the provisions of the Ordinance have been applied or for any branch of, or any function or process in, any such trade; and declare that the powers, duties and functions under this Ordinance of any Wages Boards so established for any trade shall extend to any other trade to which those provisions have been applied. Section 9 stipulates that every Wages Board will consist of a Commissioner and members representing employers in the trade for which the Board is established, and members representing workers engaged in such trade, and of nominated members. The number of representative members of a Wages Board shall be determined by the Minister and one-half of this number shall be representatives of the employers and one-half shall be representatives of the workers. All representative members of a Wages Board shall be appointed by the Minister. Where the powers, duties and functions of any Wages Board are extended, the Minister may appoint an equal number of additional representative members to represent employers and workers, respectively. Any person may be appointed a representative member of a Wages Board notwithstanding that he is not an employer or a worker in the trade for which the Board is established.

How are up ratings (adjustments) of minimum wages decided upon?

Uprating of minimum wages are decided jointly by government, trade union representatives and employer.

Which are the components of minimum wage in Sri Lanka?

A basic wage and very rarely with the component of cost living allowance.

How frequently is the fixed component of minimum wage updated?

Depending on the CCLI and COLA, minimum wages are revised on an annual basis or at the request of trade union.

How frequently are the variable components of minimum wages updated?

The variable component of minimum wage is updated anytime between 6 months to one year.

What is/are the yardstick/s on which minimum wage up ratings are based?

Minimum wage upratings are based on wage indexation, consumer price indexation & (decent) living standard.

What is the national poverty line? (In national currency)

Official Poverty line at national level for June 2011 is Rs. 3239 (Source: Department of Census & Statistics - Sri Lanka)

How often is poverty line updated?

Poverty line in Sri Lanka is updated at irregular intervals.

What is the incidence of minimum wages(s) in the national labour force (wage earners only)?

As per Central Bank Annual report -2010, the incidence of minimum wages(s) in the national labour force is 2.2 Million out of 7.6 million.

When was poverty line last updated? (Specify YYYY/MM)

Poverty line was last updated in June 2011.

What is the percentage of minimum wage relative to the current poverty line?

Minimum wage is about twice the poverty line.

How is minimum wages compliance regulated?

The Commissioner of Labour enforces the law. Section 52 stipulates that there may be appointed officers and servants from time to time as required for the purpose of carrying out or giving effect to the provisions of the Wagers Boards Ordinance. The appointment of any such person may be made by name or by office. The Commissioner may either generally or specially authorize any Deputy Commissioner or any person so appointed to exercise, perform or discharge any power, duty or function of the Commissioner under the Ordinance.

Which legal sanctions can be applied if compliance is lacking?

According to Section 44, every employer who fails to pay wages to any worker shall be guilty of an offence and shall be liable (a) in the case of a first offence, to a fine not less than one hundred rupees nor exceeding two hundred and fifty rupees; (b) in the case of a second offence, to a fine not less than two hundred and fifty rupees nor exceeding five hundred rupees; and (c) in the case of a subsequent offence, to a fine not less than five hundred rupees nor exceeding one thousand rupees or to imprisonment of either description for a term not exceeding six months or to both such fine and imprisonment, and shall in addition be liable to a fine not exceeding fifty rupees for each day on which the offence in continued after conviction.

To whom/Where can individuals complain, if they think they are earning less than minimum wages?

According to section 52 and 55 of the Wage Board Ordinance, Labour Officers are appointed by the government who have the power to inspect in any premises in which workes are empolyed.