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Sri Lanka - Minimum Wages - 2011


LAST UPDATE

28 October 2011

SOURCES


Name of Act

Shop and Office Employees Act Act No. 19 of 1954, dated 9 August 1954, as amended up to Act No. 44 of 1985. Published by the Ministry of Labour at http://www.labourdept.gov.lk and accessed 24 October 2011.
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Name of Act

Wages Boards Ordinance, Ordinance No. 27 of 1941 of 19 September 1941, as amended up to Act No. 36 of 1982. Published by the Ministry of Labour at http://www.labourdept.gov.lk and accessed 24 October 2011.
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Other source used

Wages Boards Ordinance - Notifications 2010 as published in the Gazette of the Democratic Socialist Republic of Sri Lanka, Extraordinary Editions 1660/34, 1664/24, and 1668/19. Further notification(s) published in Extraordinary Edition 1636/10, but relevant Gazette not identified.

Other source used

’Understanding Labour Law’ Planning, Research and Development Division of the Ministry of Employment and Labour Sri Lanka, 2002

LEGAL DEFINITIONS


Employee/worker

’Worker’ means any person employed to perform any work or trade.
Wages Boards Ordinance §64

Employer

’Employer’ means any person who on his own behalf employs or whose behalf any other person employs, any worker in any trade, and includes any person who on behalf of any other person employs any worker in any trade.
Wages Boards Ordinance §64
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Wage

’Wages’ includes any remuneration due in respect of overtime work or of any holiday.
Wages Boards Ordinance §64

MINIMUM WAGE FIXING


Procedure


Procedure in general

The Wages Boards Ordinance establishes a process by which minimum rates of wages are determined by tripartite, trade-specific Wages Boards, and come into force following the approval of the Minister and publication in the Gazette.

Where minimum rate of wages have been set for a trade, every employer with a worker in that trade shall pay wages at not less than the minimum rates applicable to that worker.
Wages Boards Ordinance Part II

Government decides after tripartite or bipartite body discussions/recommendations

A Wages Board may be established for any trade, or for any branch of or function or process in any such trade, by order of the Minister. All Wages Boards shall consist of the Commissioner of Labour (as Chairman), an equal number of employer and worker representatives, and up to 3 independent nominated members. A Wages Board established for any trade may also constitute a District Wages Committee for that trade in any area or district, to which the Wages Board may refer, for consideration and report, any matter regarding which the Wages Board is empowered or required to decide.

Once a Wages Board is established, it shall determine a general minimum time-rate (i.e. minimum wage for time workers) in the relevant trade or part there-of within one year. The Wages Board may also determine a general minimum piece-rate and a guaranteed time-rate for piece workers, and overtime rates for time workers and piece workers. Such rates may consist of a basic rate and a special allowance (adjustable in accordance with the applicable cost of living index number), which shall together constitute the minimum rate of wages for the relevant trade.

Before making a decision in relation to minimum rates of wages, the Board must publicise the proposed decision and allow for a period during which written objections may be submitted for the Board’s consideration. The decision must then be submitted through the Commissioner of Labour to the Minister for approval, and will only take effect once notice of such approval is published in the Gazette or on such later date specified in the notification. Where the Minister does not approve of the decision, the matter may be referred back to the Wages Board for reconsideration.

Where a Wages Board cannot be established for a particular trade, or fails to make a decision within one year of its establishment, the minimum rates of wages for the relevant trade may be set by the Commissioner of Labour. The Commissioner must also publicise any propose decision and submit the proposal to the Minister for approval and notification.
Wages Boards Ordinance §§6, 7, 8, 9, 18, 19, 20, 28, 29, 33
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Criteria


Cost of living

No statutory criteria for setting the minimum rates of wages identified. However, minimum rates set by a Wages Board decision may consist of a special allowance at a rate to be adjusted, at such intervals and in such manner as the Wages Board directs, to accord as nearly as practicable with the variation in the cost of living index-number applicable to workers in that trade.
Wages Boards Ordinance §20(2)(a)(ii)

Coverage


Scope

The scope of the minimum rates of wages and other rules set in Wages Board decisions, made under Part II of the Wages Boards Ordinance, are subject to the order of the Minister under §§6 and 8 of the Ordinance.

However, Part I of the Wages Boards Ordinance (which establishes rules relating to rates of payment and permissible deductions) applies to all workers who are employed to perform any work in any trade, subject to any Wages Board decisions or other prescriptions under Part II.
Wages Boards Ordinance §§2, 3, 5, 6, 8

Coverage rate

Currently, minimum rates of wages apply to over 35 trades in Sri Lanka.
Wages Boards Ordinance - Notifications 2010 Notifications in Gazette 1660/35 - minimum rates of wages for 27 trades Notifications in Gazette 1664/24 - minimum rates of wages for 3 trades
Notifications in Gazette 1668/19 - minimum rates of wages for 5 trades
Notification(s) in Gazette 1636/10 - relevant Gazette not located
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Specific minimum wage rates


» Specific minimum wage by occupation

A Wages Board may be empowered to set minimum rates of wages for a specified branch of a trade, or particular function or process within a trade. Further, and irrespective of their jurisdiction, Wages Boards may determine different rates of wage for particular branches of the trade or affecting particular classes of workers.
Wages Boards Ordinance §§8, 27

» Specific minimum wage by sector

Wages Boards are empowered to set minimum rates of wages for particular trades.
Wages Boards Ordinance §8
Wages Boards Ordinance - Notifications 2010

» Specific minimum wage by region

Wages Boards may determine different rates of wages for particular areas of workers within a single trade.
Wages Boards Ordinance §27

» Minimum wage levels for specific categories of workers


» Trainees

A Wages Board may determine the conditions subject to which any workers may be employed in that trade as apprentices or learners.
Wages Boards Ordinance §40

» Domestic Workers

No minimum wage rate for domestic workers identified.

» Disabled

Permits may be granted by the Commissioner of Labour exempting the employment of a person with an infirmity or physical injury from minimum rates of wages which are otherwise applicable to that employment. The exemption may be subject to such conditions as may be prescribed.

Such permits may be revoked by the Commissioner after giving notice in the prescribed manner to the employer of the worker.
Wages Boards Ordinance §39

» Piece-rate workers

A Wages Board may determine a minimum rate of wages for piece work (a ’general minimum piece-rate’) and a minimum time-rate to apply in the case of workers employed in piece-work for the purpose of securing to such workers a minimum rate of remuneration on a time-work basis (a ’guaranteed time-rate’).

Where no general minimum piece rate have been set for a trade to which a general minimum time rate applies (i.e. the minimum rate for time work set by a Wages Board decision), an employer must ensure that any piece-workers are paid a piece-rate that yields at least the same remuneration as the general minimum time-rate.
Wages Boards Ordinance §§20(1)(a), 20(1)(b), 36

Level


Minimum wage level(s) in national currency

The minimum wage levels vary by industry, position and seniority, according to the terms of the relevant Wages Board decision.

One example is the Notification of the decision of the Wages Board for the Garments Manufacturing Trade, which stipulates the following range of minimum wage rates:
(i) Grade 1(a) - between 8,100 rupees and 8,900 rupees per month, depending on year of employment;
(ii) Grade V - 4,830 rupees per month.
Wages Boards Ordinance - Notifications 2010 See Notification 1669/19 published 27 August 2010 at pp6A-7A

Last minimum wage update

The date of the last minimum wage update varies across the industries, between 4 dates in 2010:
(1) Notifications in Gazette 1660/35 (26 trades) - 30 June 2010
(2) Notifications in Gazette 1664/24 (3 trades) - 30 July 2010
(3) Notifications in Gazette 1668/19 (5 trades) - 27 August 2010
(4) Notification(s) in Gazette 1636/10 (number not known) - 31 October 2010
Wages Boards Ordinance - Notifications 2010 See also Increases for Private Sector 2010 at www.labourdept.gov.lk

In-kind allowances

An employer shall pay wages in legal tender directly to the worker, without any deduction other than an authorized deduction made with the consent of the worker. Authorized deductions are limited to deductions made in respect of:
(i) advances of money made by the employer to the worker;
(ii) payments which are made, at the instance of the worker, out of the wages of the worker by the employer to any other person (who is not the employer or an agent of the employer) in order to discharge any obligation of the worker or for any other purpose;
(iii) income tax or inland revenue;
(iv) an order, process or decree made or issued by a court fo law; or
(v) as otherwise prescribed.
Wages Boards Ordinance §2(a)

Rate of payment


» Weekly

Where not covered by a Wages Board decision, an employer shall fix the wage period, which must not exceed one month. Where the employer fixes a wage period that does not exceed 1 week, the employer shall pay the wages for that period within 3 days of the expiry of that period.

Where a Wages Board is established with respect to the employer’s trade, the Wages Board may determine the period of work (not in any case exceeding one month) in respect of which wages shall be paid to workers, and specify the number of days from the end of that period within which wages shall be paid.
Wages Boards Ordinance §§2(b)(i), 5(1), 23(1)

» Monthly

Where not covered by a Wages Board decision, an employer shall fix the wage period, which must not exceed one month. Where the employer fixes a monthly wage period, the employer shall pay the wages for that period within 10 days of the expiry of that period.

Where a Wages Board is established with respect to the employer’s trade, the Wages Board may determine the period of work (not in any case exceeding one month) in respect of which wages shall be paid to workers, and specify the number of days from the end of that period within which wages shall be paid.
Wages Boards Ordinance §§2(b)(iii), 5(1), 23(1)

» Other

Where not covered by a Wages Board decision, an employer shall fix the wage period, which must not exceed one month. Where the employer fixes a wage period that exceeds 1 week but does not exceed 2 weeks, the employer shall pay the wages for the period within 5 of the expiry of that period. Where the employer fixes a wage period that exceeds 2 weeks, the employer shall pay the wages for that period within 10 days of the expiry of that period.

Where a Wages Board is established with respect to the employer’s trade, the Wages Board may determine the period of work (not in any case exceeding one month) in respect of which wages shall be paid to workers, and specify the number of days from the end of that period within which wages shall be paid.
Wages Boards Ordinance §§2(b)(ii), 2(b)(iii), 5(1), 23(1)

Scheduled frequency of adjustment

No scheduled frequency of adjustment identified.

Enforcement mechanisms


Labour inspection

Officers are appointed to make sure that the provisions of the Wage Ordinance come into effect. The officers have the power to enter and inspect any premises in which workers are employed for the purpose of ascertaining whether the provisions of the Ordinance are being complied with.

Employers of workers in any trade are required to maintain and keep in the premises where the trade carried out a clear and accurate written record of the following information in respect of each wage period:
(a) the wage period,
(b) the names of the workers who are paid wages in respect of such wage period,
(c) the number of hours or days during which each such worker has worked in such wage period,
(d) the wages paid to each such worker in respect of such wage period,
(e) the date of payment of such wages,
(f) the deductions from such wages, and
(g) particulars of such other matters as may be prescribed.

Where the employer fails to keep such a record, the Commissioner may assess the wages or short payment thereof on the basis of all evidence (both oral and documentary) available to him.
Wages Boards Ordinance §§3, 3D(1), 41, 52, 55
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Fines in national currency for non-respect of legislation

Every employer who fails to comply with the Wages Boards Ordinance or a Wages Board determination relevant to the employer’s trade shall be liable to a fine of:
(i) in the case of a first offence - not less than 100 rupees but not more than 250 rupees;
(ii) in the case of a second offence - not less than250 rupees but not more than 500 rupees; and
(iii) in the case of a subsequent offence - not less than 500 rupees but not more than 1,000 rupees.

Where the fine relates to a failure to pay the minimum rates of wages determined by a Wages Board, the employer will be further liable to a fine not exceeding 50 rupees for each day on which the offence is continued after conviction.
Wages Boards Ordinance §§4, 44(1), (2)

Other penalties

In the case of a third or subsequent offence, an employer may be liable to a term of imprisonment not exceeding 6 months. This sentence may be in addition or in the alternative to a fine of between 500 and 1,000 rupees.

In addition to any fine or prison sentence, and whether for a first, second or subsequent offence, the court may order an employer to pay:
(a) where a worker has not been paid the amount which ought properly to have been paid to that worker, such sum as may be found by the court to represent the difference between such amount and the amount actually paid and the surcharge payable in accordance with §4(2A) Wages Ordinance Board;
(b) where no portion of the wages due to that worker has been paid, such sum as may referred by the Court to represent such wages and the surcharge payable in accordance with §4(2A) Wages Ordinance Board.
Wages Boards Ordinance §§4(1)(c), 4(2), 44(1)(c), 44(2)(c), 44(3)
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Results generated on: 24th October 2014 at 18:55:31.
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