Hire in Bangladesh
Here’s where you get started with human resources best practices and hiring in Bangladesh.
Bangladeshi Taka (BDT)
Key Country Facts
Bangladesh, officially called the People’s Republic of Bangladesh, is a country in South Asia. It is home to more than 163 million people, making it the eighth-most populous country in the world. Bangladesh is a unitary parliamentary democracy and constitutional republic. The country adheres to the Westminster system of governance and is divided into eight administrative divisions and 64 districts.
Bangladesh covers an area of 148,560 square kilometers and shares land borders with India to the west, north and east. It shares a border with Myanmar to the southeast and the Bay of Bengal to the south. Bangladesh is narrowly separated from Nepal and Bhutan by the Siliguri Corridor. It is also separated from China by the Indian state of Sikkim in the north.
Bangladesh hosts a typical monsoon climate, characterized by rain-bearing winds, moderately warm temperatures and high humidity. A mild winter occurs from October to March. A hot, humid summer lasts from March to June. Weather and climate disasters occur almost every year, such as floods, tropical cyclones, tornadoes and tidal bores.
The land that is now Bangladesh has been part of a few political entities, including Indian empires, Buddhist kingdoms, the Mughal empire, the British empire and the Pakistani nation. The culture of Bangladesh has also been influenced by the religions of Hinduism, Jainism, Islam, Buddhism and Christianity. Bangladeshi identity solidifies around the importance of the Bengali mother tongue, as well as the unique culture connected to the floodplains of the region.
Bangladesh is officially a secular state, with the Constitution granting freedom of religion. Islam is the state religion but the country proclaims equal recognition of Hindus, Buddhists, Christians and people of all faiths. Islam is followed by over 90% of the population and Hinduism by approximately 8.5%. The rest are largely Christians or Buddhists.
The main language of Bangladesh is Bengali, also called Bangla. It is spoken as the first language by more than 98% of the population. The Bengali Language Implementation Act, 1987 enforces the use of Bengali in all government affairs in Bangladesh. Laws historically written in English were translated into Bengali after the act. All following acts, ordinances and laws have been promulgated in Bengali.
Bangladesh HR at a Glance
Bangladesh’s employment framework is regulated by the 2006 Labor Act (‘Act’) and the 2015 Labor Rules (‘Rules’). The Act and Rules apply to employees in commercial and industrial enterprises. The laws and regulations prescribe working hours, weekly vacations, annual leave and medical leave. It also dictates how companies use profits for gratuity, benefits, provident funds and employee participation.
Written employment contracts are a standard practice in Bangladesh, with the terms of the contract being legally-binding. In the absence of a written employment agreement, employers must issue the employee a letter of appointment in Bengali.
The appointment letter should contain the following information:
- the name of the worker
- the name of the worker’s parents
- the name of the worker’s spouse (if applicable)
- the present and permanent addresses of the worker
- the designation of the worker
- the type of work to be undertaken by the worker
- the date on which the worker will join the organization
- the class of the worker
- the wages or pay scale (wages or salary and the rate of the increase of annual salary, if any)
- other payable financial benefits (rent, medical expenses, gratuity and allowances for education, food, conveyance, festival and attendance, if any)
- a statement that the conditions of appointment will be governed by the establishment’s existing service rules (if any) and the existing Labor Act.
Workers are graded according to the type and condition of their work in any of the following classes:
- Substitute/ Badli
The minimum age for workers in Bangladesh is 16 years.
Neither the Labor Act nor the Labor Rules restricts or prohibits carrying out background checks. An employer can conduct its own checks or hire a third party to do so.
Probation Period / Trial Period
Probation periods vary between industries:
- If nature of work is clerical: six months
- Other workers: three months, but extendable for a maximum of another three months if it is not possible to ascertain the quality of work in the first three months
A worker will be considered a permanent worker after the probationary period if completed, even if a confirmation letter has not been issued.
The maximum work week in Bangladesh is 48 hours, typically spread over six eight-hour days. The weekly day of rest is usually Friday, because Bangladesh is a majority Muslim country.
Full-time workers are entitled to one hour of break each day, which can be divided into two half hour breaks or taken in one go.
Bonus and 13th Month Pay
Employees who have been working at a company for at least one year are entitled to two festival bonuses annually. There is no statutory minimum unless specified in the employment contract. However, each festival bonus shall not amount to more than the basic wage.
If a worker has been convicted of a criminal offence or found guilty of misconduct, an employer may terminate them without notice or payment in lieu of notice. A worker may also be terminated without any cause by giving the prescribed notice or offering pay in lieu of notice.
A permanent worker may resign his service by giving the employer 60 days of notice in writing. A temporary worker may resign by giving the employer 30 days of notice in writing (for monthly rated workers) or 14 days notice (for other workers). When a worker resigns without notice, he or she may do so by paying the employer an amount equal to the wages for the period of notice. This payment will serve in lieu of the notice.
Termination without cause
An employer may dismiss an employee on a permanent contract by offering notice in writing 120 days in advance (for monthly rated employees) or 60 days (for other employees).
In lieu of the notice, the employer can pay compensation equivalent to 30 days wages for each completed year of service or gratuity – whichever is higher.
Resignation by employee
A permanent employee may resign by offering 60 days notice, in writing, to the employer. A temporary worker may resign by giving 30 days notice (for monthly rated) and 14 days notice (for other workers) in writing.
To resign without offering any notice, the employee must pay the employer an amount equal to his or her wages for the period of notice.
Redundancy / Severance Pay
Severance must be paid for termination due to an employee’s ill health or redundancy, so long as the employee has been in service with the same employer for at least one year. The amount of severance varies depending on the employee’s length of service:
- For <10 years continuous service: 30 days of wages for every year of service
- For >10 years continuous service: 45 days of wages for every year of service
If an employee is dismissed due to misconduct, he or she is not entitled to any compensation.
When a permanent worker resigns, gratuity is offered according to their years of service:
- >five but <10 years: 14 days of wages for every completed year of service
- >10 years: 30 days of wages for every completed year of service
Post-Termination Restraints / Restrictive Covenants
The validity and enforceability of a non-compete clause are regulated by Section 27 of the Contract Act 1872 of Bangladesh. This section states, ‘Every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void.’ Thus, any agreement to restrain trade, profession or business is considered void.
However, employers may attempt to implement restrictive covenants by having a carefully drafted, clear and precise ‘non-compete’ clause with the employee’s agreement. The employer should also outline provisions for liquidated damage and limit the period of time. They must also be able to show proof there is confidential information or trade secrets to be protected.
Fixed-term contracts are permissible in Bangladesh under the category of temporary employment. The labor laws do not stipulate a maximum duration of time for such employment.
Tax and Social Security
The salary paid to employees is liable to an income tax deduction at source. All remuneration and benefits received by an employee who is a resident in Bangladesh are taxable. The same goes for remuneration and benefits received related to services rendered in Bangladesh.
Taxable remuneration and benefits include salary, bonuses, commissions, accommodation allowances, transport benefits, education allowances for children, employer-provided domestic assistance, leave encashment and medical allowances.
Personal Income Tax
|Income Level (BDT)||Tax Rate (%)|
|Up to 300,000||0.0|
|On amount >500,000||25.0|
Employees in Bangladesh are not required to contribute to a social security fund. However, companies with paid-up capital of at least BDT 10 million or with value of permanent assets of at least BDT 20 million must pay 5% of their profits into a Workers Profit Participation Fund. It is not compulsory for employees to contribute to this fund.
There is no social security tax in Bangladesh.
*The above rates serve as a broad guideline. Actual rates charged by GoGlobal will differ.
Salary payment or remuneration >BDT 20,000 must be conducted by bank transfer. Salary is required to be paid before the end of the seventh day after the last day when the wage is payable.
Employees who have completed one year of continuous service with an employer are entitled to annual leave. They shall receive:
- one day for every 18 days worked (for shop, commercial, industrial, factory or road transport establishment workers)
- one day for every 22 days worked (for tea plantation workers)
- one day for every 11 days worked (for newspaper workers)
If an employee does not use all accrued overtime in a year, he or she can carry forward the unused time. However, this is subject to the following limitations:
- Up to 40 days for factory or road transport workers
- Up to 60 days for shop, industrial, commercial or tea plantation workers
All employees in Bangladesh (except newspaper workers) are entitled to receive 14 days of paid sick leave in a calendar year. To receive sick leave, employees must present a medical certificate.
Maternity & Parental Leave
- Employees who have been in service of the same employer for at least six months are eligible for maternity leave of eight weeks before delivery and eight weeks after.
- Employees who have worked less than six months, or who have two or more surviving children, are only entitled to unpaid leave.
- Women are not permitted to work for eight weeks after giving birth.
Even if a female employee gives notice of maternity leave after the birth of her child, she is still entitled to the maternity benefits of eight weeks following the date of the child’s delivery.
- There is no statutory paternity leave in Bangladesh.
- Casual leave is intended for the purpose of sudden illness, minor accidents and urgent issues. Prior application is required for this leave, unless the situation prevents such an application from being submitted.
- Employees are entitled to 10 days of paid casual leave per year. This cannot be carried over to the next year.
There are 15 major public holidays each year, 11 of which are paid days. The latter is known as festival leave.
Employees are entitled to payment if the bargaining contract states they should be paid on the optional holidays or if the employees are part of a union that advocates for their wages and salaries.
Benefits to the Employee in Bangladesh
In certain situations, a worker is entitled to compensation or gratuity (whichever is higher). These circumstances can include death, retrenchment, discharge or termination of employment.
A worker may also be entitled to be compensated in the event of a layoff or dismissal, depending on the specific circumstances.
A worker may be entitled to a provident fund, if the fund has been constituted in the establishment.
A worker may also be entitled to workers’ profit participation fund and workers’ welfare fund, if these features are applicable within the establishment.
Employers are required to provide compensation to any employee who sustains a work-related injury. The set compensation is contingent on the worker’s age.
Old-age Social Pension
Old-age social pension is available for men aged 65 and above or women aged 62 and above whose annual income does not exceed BDT 10,000. They must not receive any other government or nongovernment allowance. Only one member of a family is entitled to receive the pension.
Disability Social Pension
To receive a disability social pension, an individual must be aged 6 or older and medically assessed with a sensory, mental, speech or physical disability. They must not receive any other government or nongovernment allowance. Their annual income does not exceed BDT 36,000.
Survivor Social Pension
This is paid to widows and women who are divorced or abandoned by their husbands. They must not receive any other government or nongovernment allowance and their annual income cannot exceed BDT 12,000.
Large companies may provide employees with additional benefits, such as:
- Private health insurance
- Car facilities
- Subsidized meals
Most companies in Bangladesh provide provident benefits to their permanent employees, which are usually derived from contributions made by the employer and employee. Employers also commonly provide gratuity benefits to permanent employees.
Visas and Foreign Workers
Short-term visas do not have numerical limitations. Employment visas and work permits are available for employees transferring from one corporate entity in a foreign jurisdiction to a related entity in Bangladesh if the labor market test is satisfied, based on the ratio of foreign to local employees.
Foreign workers must obtain an employment visa and a work permit in order to work in Bangladesh.
A labor market test is required as a precursor to receiving an employment visa and a work permit. Prior to appointing a foreign national, a job advertisement must be published in a daily newspaper or online to first allow for the recruitment of locals.
The current maximum ratio of foreign to local employees is set at 1:5 for commercial offices and 1:20 for industrial enterprises.
Foreign nationals are generally taxed only on income they earn working in Bangladesh. Any foreign income received from Bangladesh sources is also taxable.
Public Holidays in 2023
|3||Sheikh Mujibur Rahman’s Birthday||17.Mar.2023|
|5||Bengali New Year||14.Apr.2023|
|8||Eid ul-Fitr Holiday||21.Apr.2023|
|10||Eid ul-Fitr Holiday||23.Apr.2023|
|13||Eid ul-Adha Holiday||28.Jun.2023|
|15||Eid ul-Adha Holiday||30.Jun.2023|
|17||National Mourning Day||15.Aug.2023|
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