Effortless Hiring in Bangladesh

Employment Laws

• The Bangladesh Labour Act, 2006, along with its subsequent amendments, governs labor relations in Bangladesh, encompassing worker rights, working conditions, minimum wage, overtime, and employment termination.

Onboarding Process

Employers typically require:

• A written employment contract detailing job responsibilities, compensation, and terms of employment.
• Verification of the employee's age to ensure compliance with the minimum employment age of 14 years.
• Collection of personal identification documents and tax identification numbers.

Types of Employment Contracts

• Permanent Contracts: Indefinite duration with full benefits.
• Fixed-Term Contracts: Employment for a specified period or project.
• Temporary Contracts: Short-term assignments, often for specific tasks.

Payroll Frequency

• Employees are generally paid on a monthly basis, with payments typically made on or before the last day of the month.

Minimum Wage

• The minimum wage varies by industry and job classification. As of January 1, 2024, the minimum wage is approximately 78 BDT per hour, amounting to around 12,500 BDT per month for a standard 40-hour workweek.

Payroll Deductions

• Income Tax: Progressive tax rates ranging from 0% to 25%, depending on income levels.
• Social Security Contributions: While Bangladesh has a social security system, employers and employees are not required to make contributions to it.
• Other Deductions: May include provident fund contributions and professional taxes, depending on company policy and employee agreements.

Employee Income Tax

• The tax year runs from July 1 to June 30. Employers are required to withhold income tax when making payments to employees. Income tax is imposed on residents based on progressive tax rates ranging from 0% to 25%. Non-residents (excluding Bangladeshi non-residents) are taxed at a flat rate of 30%.

Employer Contributions

• There are no mandatory employer contributions to social security in Bangladesh.
• Employers may voluntarily establish provident fund schemes, contributing a portion of the employee's salary.

Types of Leave in Bangladesh

1. Annual Leave

• Employees are entitled to annual leave with wages, typically ranging from 14 to 18 days depending on industry standards.

2. Casual Leave

• Employees are entitled to 10 days of casual leave per year.

3. Sick Leave

• Employees receive up to 14 days of sick leave per year with a medical certificate.

4. Festival Holidays

• Employees are entitled to up to 11 days of paid festival holidays per year.

5. Maternity Leave

• The Bangladesh Labour (Amendment) Bill, 2023 increased maternity leave to 120 days from the previous 112 days.

Mandatory Benefits

1. Employers must provide maternity leave as stipulated by law.
2. Festival bonuses are common in many industries, often equivalent to a month's salary, though not mandated by law.

Supplemental Benefits

Employers may offer additional benefits such as health insurance, transportation allowances, and housing provisions to attract and retain talent.

Process

Termination can occur through various methods including dismissal for misconduct, retrenchment, or redundancy. Employers must provide written notice and adhere to due process, including the opportunity for the employee to respond to allegations in cases of misconduct.

Notice Period

• For permanent workers:
• 120 days for monthly-rated workers;
• 60 days for others.
• For temporary workers:
• 30 days for monthly-rated workers;
• 14 days for others.

Severance Pay

For permanent workers, severance compensation is due at the rate of 30 days' wages for every completed year of service or gratuity, whichever is higher.