Business

Employers to start prorating salaries immediately

  •   Employees guaranteed minimum Rs. 14,500
  •   ‘Working from home’ entitled to full salary

 

By Charindra Chandrasena

Private sector businesses will immediately start paying their employees on a prorated basis following an agreement reached with the Government last week, according to The Employers’ Federation of Ceylon (EFC).

Under this new system, employers will not have to pay the full salary to an employee who hasn’t been required to report to the workplace or work from home.

Speaking to The Sunday Morning Business, EFC Director General (DG)/Chief Executive Officer (CEO) Kanishka Weerasinghe said that employers will implement this scheme without delay.

“This is a major relief for us. We will start this arrangement immediately because this is only applicable for two months,” he said.

This agreement was reached during a meeting between Skills Development, Employment, and Labour Relations Minister Dinesh Gunawardena, the EFC, and trade unions, on Tuesday (5).

The prorating system is designed to ensure that every employee receives a minimum monthly salary of Rs. 14,500, even if the said employee was not required to report to the workplace or work from home a single day of the month.

The employer is required under this system to pay such an employee 50% of the basic salary or Rs. 14,500, whichever is higher. If the employee was required to report to work or work from home for only a week in that month, he or she would be entitled to 25% of the total salary, including allowances. However, in addition to this, the employee would also be entitled to either 75% of Rs. 14,500 or 50% of what his or her basic salary would be for a three-week period.

However, if the employee has worked from home for an entire month, he or she would be entitled to the total salary, as it would be outside the scope of this scheme.

When contacted, Commissioner General of Labour R.P.A. Wimalaweera told The Sunday Morning Business that this scheme has been devised to encourage employers to keep their employees on the payroll through these tough times, even on a rotation basis.

“This is to encourage the private sector to employ the workers as much as possible or to use them on a roster basis. If an employee is employed on a fulltime basis, the employer is liable to pay the basic salary plus allowances. This is for companies that are struggling to start their business and for those that are working below full capacity. In that case, it is unfair to expect them to employ their full staff,” he said.

When inquired as to whether this could be abused by employers to make employees work from home but only pay them Rs. 14,500 or 50% of the basic salary, Wimalaweera said that such cases could be brought to the attention of the Labour Department, which would examine the case and make a decision.

Such a scheme was included in a list of proposals submitted by the EFC to the Labour Minister on 25 April to provide relief to employers and prevent bankruptcies.