Employment Laws in Bangladesh

Contractual Agreements

You must provide an appointment letter upon hiring in Bangladesh. This letter must outline the following employment details: 

• Employee's details (name, address, marital status)
• Job title and duties
• Start date
• Wage, salary details, and other benefits (housing allowance, healthcare, etc.)
• Reference to any existing company service rules

Moreover, the rise of freelancers and remote employees in the workforce requires Data Processing Agreements to avoid misclassification risks or the breach of data privacy during employment. 

Types of employment contracts in Bangladesh

There are no specific regulations in Bangladesh categorizing employment agreements. However, here are some common types of work arrangements used in practice:

• Indefinite-term or Permanent contract: Typically full-time positions offering job security and benefits after a probationary period.

• Fixed-term or Temporary contract: Suitable for project-based work or seasonal needs, these contracts specify a fixed duration for employment.   

• Probationary contract: Also known as a trial period, probationary contracts allow employers to assess employees’ suitability for the job role for three to six months without obligation to extend statutory benefits and termination protections.

You may engage with freelancers under the contract employment laws in Bangladesh. 

Obligations and rights for both parties

• You are responsible for adhering to minimum wage requirements and providing statutory benefits. 
• You must accept the request for study leave in addition to extending other statutory leave benefits. 
• Furthermore, you may hold employees accountable for assigned tasks and confidentiality.

Working Hours and Overtime

Here is an overview of statutory working hours and overtime regulations in Bangladesh: 

Regular working hours

• The employment laws in Bangladesh prescribe a standard work week from Sunday to Thursday.  
• You may frame regular working time at eight hours a day or 48 hours a week. Further, any night work is restricted to seven hours a day or 42 hours a week.
• However, you must ask for consent from women employees before scheduling night work (between 10.00 PM and 6.00 AM). 
• You must schedule a 30-minute break for every four hours of work. 

Overtime regulations and compensation

• Bangladesh labor law allows regular working hours to increase to 10 hours a day or 60 hours a week, maintaining a weekly average of 56 hours in any year. 
• Additionally, you must compensate for overtime work at twice the regular hourly pay. 

An Employer-Of-Record (EOR) solution in Bangladesh can help you manage employment compensation and benefits more effectively.

Minimum Wage and Compensation

You may compensate full-time employees, including remote employees in Bangladesh, based on industry-specific statutory minimum wage. 

The minimum wage rate in 2024

• Industry-specific minimum wage applies for the garment industry at BDT5,300.
• You may refer to the current monthly minimum wage of BDT1,500 if there is no industry-specific wage. 
• The minimum wage in Bangladesh was last revised in 2013. 

Factors affecting wage determination

• While usual factors of the labor market in a developing country determine wages, the employment laws in Bangladesh require employees to receive an income that covers the basic cost of living.
• You must pay full-time employees in Bangladesh in Taka (BDT) at least once a month, preferably on the last working day. 
• Meanwhile, partnering with an Employer-Of-Record (EOR) in Bangladesh can help you find more effective ways to pay your remote employees. 

Employee Benefits and Social Security

The employment laws in Bangladesh prescribe limited employee benefits and different social security obligations. 

Statutory benefits

• You must guarantee employees paid festival holidays, sick leave, casual leave, and family leave benefits. 
• You must compensate for working on any festival holiday at twice the usual pay and a substitute holiday. 
• The labor law in Bangladesh allows payment for unused annual leave or carry forward based on employee category: 
  • Factory or road transport workers: 40 days
  • Tea plantation, shop, commercial, or industrial workers: 60 days

Additional perks and benefits

• You may attract and retain talent through additional benefits like health insurance, transportation allowances, provident funds, and performance bonuses.
• Maternity leave benefits apply after six months of employment. However, employment laws in Bangladesh require employees who have been employed for less than six months or already have two other surviving children to get unpaid leave.

Social security contributions and requirements

• The employment laws in Bangladesh do not prescribe a traditional social security system with employee contributions. 
• Instead, companies of a specific size contribute 5% of profits to a Workers' Profit Sharing Fund.
• Additionally, the labor laws of Bangladesh require submitting monthly reports to the tax authority detailing the withheld employee income tax.
• Employers must file annual returns by September 1st each year and report on employees' tax filing status by April 30th each year.

Vacations and Paid Time Off

Bangladesh labor law entitles employees to the following paid and unpaid leaves. Let’s discuss it further. 

Annual leave entitlement

• You may accumulate paid annual leave at the rate of one day for every 18 days of work. However, you may extend the yearly leave benefits after one year of employment. 

Public holidays and special leaves

• You may grant 11 days of paid festival holiday in a calendar year.

• You may further extend statutory leave benefits under the labor law in Bangladesh for reasons including:
  • Sickness: 14 days of paid leave per year.  
  • Education: Your internal policy can determine the duration and whether it be paid or unpaid study leave.
  • Casual: 10 days of paid leave in a year

• Additionally, the labor laws of Bangladesh prescribe the following family leave benefits: 
  • Maternity leave: 16 weeks of paid leave, preferably taken eight weeks before and eight weeks after the birth. 
  • Paternity leave: While the statutory mandate is five days, you may extend it up to four weeks of paid leave.

Termination and Severance

Here is a summary of termination and severance pay regulations under the employment laws in Bangladesh:

Grounds for termination

• Termination during probation: You may terminate the contract for expectations mismatch within three months of the probationary period in Bangladesh. 
• Termination due to poor performance: Unsatisfactory performance may be the cause for termination. 
• Termination due to business redundancy: You may terminate the contract if you are shutting down operations due to a cash crunch or company reorganization/restructuring.
• Termination with cause: You can terminate the contract immediately for intentional misconduct, breach of trust, or neglect of job duty.

Explore more ways to terminate an employee legally with EOR solutions.   

Notice period and severance pay

The labor law provides for varying notice periods upon termination:

• You may offer at least one month of wage as a severance payment for redundant workers who have worked for more than one year.

Discrimination and Equal Opportunity

The private sector in Bangladesh lacks regulatory oversight to prioritize specific groups during hiring. However, new amendments to employment laws align with International Labor Organization standards and are expected to be implemented soon. You need an EOR solution to guide you through this labor regulations flux. 

Health and Safety Regulations

Bangladesh has a legal framework for workplace safety. The country’s garment industry established a new independent body, the RMG Sustainability Council (RSC). This council will carry out critical safety measures, including inspections, training, complaint mechanisms, and public transparency on factory conditions. 

Meanwhile, Bangladesh labor law requires compliance with working hour rules for employees’ health and safety.

Stay Compliant with Skuad

You can overcome the uncharted complexities of employment law in Bangladesh with Skuad’s global EOR platform. Our HR compliance solutions address onboarding, payroll, and legal compliance per local requirements in 160+ countries, including Bangladesh. 

This lets you focus on finding the best talent worldwide without the burden of setting up local entities or dealing with international employment regulations. 

Start building your global dream team today. Contact Skuad to learn more.

FAQs

Q1. What is the Labour law in Bangladesh 2024?

A1. The labor law in Bangladesh 2024 is the revised version of the Bangladesh labor law of 2006. It aims to introduce new relaxations in maternity leave, trade union rights, appeal tribunals, and more. At the time of writing, the reconsidered bill is expected to be discussed in the upcoming parliamentary session.

Q2. What is Labor right in Bangladesh?

A2. Labor rights in Bangladesh guarantee a minimum wage, limitations on work hours, paid leave, safe work environments, and the right to join unions. 

Q3. What is the employment contract in Bangladesh?

A3. Although an employment contract is not mandatory in Bangladesh, it outlines the terms of employment in a legally binding document.

Q4. What are the termination laws in Bangladesh?

A4. The termination laws in Bangladesh provide grounds for termination, a mandatory notice period of three months to six months, and obligatory severance pay requirements.