Bangladesh

Overview

Bangladesh is the 32nd largest economy in the world by purchasing power parity (PPP). The country’s economy has grown steadily at around 6% annually since the mid-1990s and grew at 7.28% in 2017. The major industries that drive growth include export of readymade garments, shipbuilding, jute, seafood, fish, and leather goods. Garment exports account for 80% of total exports, which along with overseas remittances provide sustainability to the country’s economy.

Currency: Bangladeshi Taka

Principal Language: Bengali

Government: Parliamentary Democracy

Capital City: Dhaka

Major Cities: Chittagong, Khulna, Rajshahi, Barisal, Sylhet, Comilla

Employment Contracts

In Bangladesh, employers must issue a letter of appointment if there is no written contract. The terms of the contract are binding between the employee and employer, and must comply with the Labour Act’s provisions.

The maximum permissible probationary period for employees in a clerical role in Bangladesh is 6 months and 3 months for other workers. The probation period for skilled workers can be extended by an additional 3 months if it was not possible to ascertain the quality of work within the first 3 months.

Work/Time Regulations

The Bangladesh Labour Act, 2006 restricts working time in any establishment to 8 hours during a day and 48 hours during a week. Women cannot be made to work between 10.00 pm and 6.00 am in any establishment without their consent.

Any worker of a shop, industrial establishment or commercial establishment must be allowed a resting period of 1½ days per working week. Factory workers are entitled to 1 day of rest. Employees of a road transport service are entitled to a resting period of 24 consecutive hours per working week.

Overtime
Overtime is payable at double the regular rate of basic wage plus dearness allowance, including interim or ad-hoc pay. Limitations on overtime hours are as follows:

  • The normal or regular working hours in any establishment cannot be more than 48 hours in a week.
  • An adult worker is allowed to work more than 48 hours in a week provided the total number of hours does not exceed 60 in a week, and an average weekly work time of 56 hours during a year.

Leave

Holidays
Employees in Bangladesh get 15 national holidays. These are spread over 19 days in the Hijri, Bengali, and Gregorian calendars.

  • Eid e-Milad-un Nabi
  • Feb. 21: Shaheed Dibosh and International Mother Language Day
  • March 17: Sheikh Mujibur Rahman's birthday
  • March 26: Independence Day
  • Bangla New Year
  • Buddha Purnima
  • Shab- e-Barat
  • Juma-tul-Wida
  • Shab-e-Qadar
  • Eid-ul-Fitr
  • Aug. 15: National Mourning Day
  • Shuvo Janmashtami
  • Eid-ul-Adha
  • Ashura (Muharram)
  • Dec. 16: Victory Day
  • Dec. 25: Christmas Day

The law mandates a minimum of 11 days’ leave for festivals every year. When a worker is made to work on such a date, he or she receives double the wages for work done during the day and as well as a day off on an alternate day.

Annual Leave
Employees who have completed 1 year of service in any organization are entitled to fully paid annual leave calculated as follows:

  • 1 day of leave for every 18 work days for industrial or commercial establishments, factory or road transport service providers
  • 1 day of leave per 22 days of work for tea plantation workers
  • 1 day of leave for every 11 days of work for newspaper workers

Maternity Leave
Women employees are eligible for maternity leave of 8 weeks before and 8 weeks after the childbirth provided they have completed at least 6 months of employment before the delivery. Women employees who have worked less than 6 months, or already have 2 or more surviving children, are eligible only for unpaid leave in most cases.

Sick Leave
14 days of sick leave is granted to all workers other than newspaper workers. Employees need to submit a medical certificate to receive sick leave.

Benefits

Pension and Social Security
It is not mandatory for employees in Bangladesh to contribute towards any social security fund. Companies that satisfy the criteria set out in the Bangladesh Labour Act 2006 need to pay 5% of their profits into a Workers Profit Participation Fund which provides benefits to all employees except the owners, partners or a director of the company employed for at least 9 months.

Healthcare and Benefits
Large local and multinational companies typically provide employees with private health care, car facilities, subsidized meals, and other fringe benefits. Employers must also pay compensation to employees who suffer a personal injury arising out of and in the course of his employment. Most of the companies in Bangladesh provide provident and gratuity benefits to permanent employees. Provident funds are generally built through the contribution of both the employees and employers. Provident funds for ‘workers’ within the meaning of the Bangladesh Labour Act 2006 have to be as per the requirements set out in the said Act.

 Welfare and Social Protection
The setting up of provident fund is not compulsory. It is based on the demand of a specific number of workers. Providing for Group insurance is also based on the number of the workers and the required number is high in most industries. The amount of compensation that workers receive due to disability, work-related injury, and death is not sufficient for the worker and his/her family. The provision of compensation varies according to the age of the workers, with an adult worker getting Tk.1,25,000 for complete permanent injury whereas the benefit payable to a child/adolescent/young worker is Tk.10,000 only. Other aspects of social protection have remained untouched in the labor law of Bangladesh such as provisions on pension and medical and life insurance for the workers. There are no pension schemes sponsored by the government in Bangladesh.

How GPS can Help

With our Global PEO/Employer of Record services, companies can expand into Bangladesh and hire their employees without having to establish a branch office or subsidiary in Bangladesh.

  • Your candidate is hired via our Bangladesh PEO. If needed, we can also help you find the right talent in any country with our comprehensive global staffing services.
  • Your new employee begins work quickly as we take care of employment contracts, statutory and non-statutory benefits, and running their payroll - all in full compliance with Bangladesh laws.
  • Global PEO Services experts manage all day-to-day operational issues such as employee expenses, and severance/termination if required.
  • With no contractor risks, pass on the compliance burden to Global PEO Services.

Spin Off/M&A Support

  • Ensure continuity of payroll, benefits and HR support when acquiring or spinning off a business with employees overseas.

24/7 Support in 100+ Countries

  • Empower your teams with 24/7 support and a single point-of-contact model in which experienced client services directors are in continuous communication with information and advice.
  • We are backed by a mix of 300+ multidisciplinary experts from HR, Payroll, Finance, Tax, and Legal domains who are ready to respond to the expected and unexpected needs of your business on the shortest notice.

Easy Visibility into Your Employee Time & Attendance and Benefits Data
With our Global PEO, you get access to Mihi, our proprietary SaaS solution for time and attendance, vacation, leave management and benefits enrollment and management. Mihi enables clients to have easy access to employee data in real time. It is designed specifically for companies with a global workforce, especially when working in multiple countries with low headcount.

Ready for Growth When You Are
When ready, we can seamlessly transition you from the PEO/EOR model to your own legal entity and provide ongoing international HR, finance, legal, compliance and staffing support. Learn more about our end-to-end international expansion services.