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Thursday, June 8, 2023

Discussions commence on minimum wage hike – The Morning

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  • NLAC subcommittee established
  • Trade unions seek Rs. 10,000 hike



BY Shenal Fernando

In response to numerous requests by employee trade unions to increase the wages of workers to compensate for increasing inflation and commodity prices, the National Labour Advisory Council (NLAC) has established a subcommittee to carry out discussions between the organisations of employers and trade unions with regard to a potential increase of the minimum wage of the country.

Speaking to The Morning Business yesterday (13), Commissioner General of Labour B.K. Prabath Chandrakeerthi stated that the NLAC has established a subcommittee under his chairmanship to bring together employee trade unions and organisations of employers to facilitate a discussion regarding a potential increase in the country’s minimum wage, which currently stands at Rs. 16,000.

“Employee trade unions have requested for the minimum wage of the country to be increased by Rs. 10,000 to Rs. 26,000. However, so far, the organisations representing employers have resisted such demands. We are, hopefully, trying to find a middle ground,” stated Chandrakeerthi.

Under the National Minimum Wage of Workers Act No. 3 of 2016, it was mandatory that all workers in any private sector industry or service in Sri Lanka be paid a minimum monthly salary of Rs. 10,000 or a minimum daily wage of Rs. 400. However, following the enactment of the National Minimum Wage of Workers (Amendment) Act No.16 of 2016, the minimum monthly wage payable to a worker was increased to Rs. 12,500 and the minimum daily wage was increased to Rs. 500 from August 2021 onwards.

In addition, under the Budgetary Relief Allowance of Workers Act No. 36 of 2005, all workers whose basic monthly salary was below Rs. 20,000 were entitled to the payment of a relief allowance of Rs. 1,000 to their monthly salary or Rs. 40 to their daily wage from August 2005 onwards. Similarly, under the Budgetary Relief Allowance of Workers Act No. 4 of 2016, all workers whose basic salary was below Rs. 40,000 were entitled to the payment of a relief allowance of Rs. 2,500 to their monthly salary or Rs. 100 to their daily wage. 

Therefore, currently, the minimum wage of a worker in Sri Lanka is Rs. 16,000, which is the aggregate of the minimum wage stipulated under the  National Minimum Wage of Workers Act and the aforementioned budgetary allowances.

Sri Lanka’s inflation on a year-over-year (YoY) basis reached a 13-year high of 15.1% in February as per the Colombo Consumers’ Price Index (CCPI), increasing from 14.2% in January. Similarly, food inflation reached 25.7% increasing from 25.0% in January. The CCPI had increased by 1.7 index points during the month of February compared to January, reaching 160.1, which represents an increase of expenditure value by Rs. 1,009.47 in the “Market Basket”.   

Following the devaluation of the Sri Lankan rupee by around 30% during the preceding week, it is inevitable that the inflation during the month of March will increase further as reflected by the recent increases in prices of fuel, bread, and the proposed increase of bus fares.    

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