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Entrepreneurs raise concerns over budget 2025 proposal on private sector salary hike

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The Sri Lanka United Businesses Alliance (SLUBA) has voiced concerns over the government’s proposal to increase private sector salaries, arguing that such an increase is not currently feasible for businesses still recovering from recent financial hardships.

SLUBA President Tania Abeysundara stressed that while salary hikes for government employees were a positive move, businesses need time to stabilize before implementing similar increases in the private sector.

Abeysundara pointed out the challenges faced by businesses, explaining, “What we need is not just data for the budget, but a practical, actionable plan. While the salary increase for government employees is commendable, private sector businesses are in a different position. A proposed increase from Rs. 21,000 to Rs. 27,000 creates an immediate gap of Rs. 6,000.”

She further explained the burden on employers, noting, “In addition to salaries, businesses are also responsible for overtime payments, which can amount to 50-60 hours per week, with Rs. 210 paid per hour. This alone adds up to about Rs. 10,000. Adding the Employee Trust Fund (ETF) and other benefits, the total increase per employee can be around Rs. 15,000. For businesses, this additional cost makes it extremely difficult to maintain profitability.”

Meanwhile, the Inter-University Trade Union Federation (IUTUF) has raised alarms about the impact of the recent salary increases for public sector employees, which they claim has led to salary reductions for some workers.

IUTUF Chairman Ranga Meegoda warned that if the situation is not addressed, trade unions may be forced to take action. He urged the government to take corrective measures to prevent further salary cuts and ensure fairness across all sectors.

As the debate continues, both business leaders and trade unions are urging the government to carefully consider the economic realities before making sweeping decisions regarding salary increases.

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