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Hiring in Pakistan requires a thorough understanding of the country’s employment laws, cultural nuances, and workforce dynamics. Employment contracts should clearly define terms such as job responsibilities, compensation, and termination conditions, with both fixed-term and permanent contracts being commonly used. The standard workweek is 48 hours, typically spread over six days, and employees are entitled to overtime pay for any additional hours worked. Minimum wage laws vary by province and industry, making it essential to stay updated on regional regulations. Employers must also comply with leave policies, which include annual leave, sick leave, public holidays, and maternity leave for female employees.
Recruitment channels in Pakistan include online job portals, recruitment agencies, and social media platforms such as LinkedIn. Referrals and local job boards are also widely used. Employers should consider the country’s diverse talent pool, which includes a significant number of skilled professionals in IT, engineering, finance, and healthcare sectors.
Understanding cultural expectations is important, as employees in Pakistan often value job security, competitive salaries, and opportunities for professional growth. Lastly, ensuring compliance with tax and social security obligations, including contributions to the Employees’ Old-Age Benefits Institution (EOBI) and Social Security Institution, is crucial for smooth and lawful hiring practices.
Pakistan is an excellent choice for finding remote employees due to its vast pool of skilled professionals, competitive labour costs, and growing digital infrastructure. The country boasts a young and dynamic workforce, with a significant portion proficient in English, making communication seamless for international companies. Pakistan has a strong presence in IT, software development, digital marketing, and customer support, with many professionals experienced in working remotely for global organisations.
The cost of hiring in Pakistan is relatively lower compared to other regions, allowing companies to access high-quality talent while maintaining cost efficiency. Moreover, the government’s focus on digital development has improved internet connectivity and remote working capabilities across the country. Cultural adaptability and a strong work ethic are additional strengths of Pakistani professionals, making them ideal for diverse remote roles. By tapping into Pakistan’s talent pool, businesses can enhance their global operations while benefiting from skilled, dedicated, and cost-effective remote employees.
Native Teams’ Employer of Record services help you hire and pay your team through an owned infrastructure in Pakistan. We handle everything from legal employment to ensuring your team is paid and managed compliantly and with care, without any third parties involved.
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Employers must follow a few essential laws and regulations to ensure a fully compliant employment process in Pakistan.
The country’s legal framework is grounded in the Constitution of Pakistan, which reflects Islamic principles of social justice. In its early years, Pakistan adopted key labour legislation from British India, including the Trade Union Act of 1926 and the Industrial Disputes Act of 1926, which helped establish workers’ rights to form trade unions and engage in collective bargaining.
The Constitution protects several fundamental labour rights. It prohibits forced and child labour, guarantees the freedom to form trade unions, prohibits discrimination based on sex and supports the right to pursue any lawful profession or conduct any lawful business.
Pakistan’s labour legislation also regulates employment relationships, wages, social security, workplace safety and workers’ welfare. Key laws and their purposes include:
Employers are required to provide written employment terms at the start of employment, including the nature of the job, the employee’s duties and the conditions of service.
The main types of employment arrangements in Pakistan include:
The contract should clearly state the type of employment, such as permanent, probationary or temporary, along with the employee’s responsibilities and salary details.
Key elements of an employment contract include:
Download a free employment contract for Pakistan through Native Teams.
In Pakistan, oral employment contracts are permitted and are commonly used by small businesses and domestic workers. However, they can be difficult to enforce because proving the agreed terms and demonstrating compliance with legal requirements may be challenging.
Written contracts are not universally mandatory, but they are strongly recommended to provide a clear record of employment terms and help prevent disputes. Electronic contracts are also permitted, provided they meet the applicable legal requirements for authenticity and security.
The Industrial and Commercial Employment (Standing Orders) Ordinance, 1968, establishes additional documentation requirements for workers covered by its provisions:
Under the Factories Act, 1934, adult workers over the age of 18 are generally limited to nine working hours per day. The legislation also specifies that female employees cannot work beyond seven PM.
The standard weekly working limit is 48 hours under both the Factories Act, 1934 and the West Pakistan Shops and Establishments Ordinance, 1969.
Overtime is permitted within prescribed limits. Under the Factories Act, total working time, including overtime, may reach up to 12 hours per day and 56 hours per week. Based on these limits, overtime should generally not exceed eight hours per week, or approximately one hour and 20 minutes per working day. The annual overtime limit is 624 hours.
Rest periods are also regulated:
Night work is defined as any work performed between 7 PM and 6 AM.
In Pakistan, employees are entitled to at least 24 consecutive hours of weekly rest, typically on Sunday. A rest break should also be provided approximately halfway through the working day, taking local customs and work requirements into account. Employees cannot be required to work continuously for more than six hours without a rest or meal break of at least one hour.
Pakistan’s employment framework provides for several types of leave, including annual leave, family-related leave, sick leave and leave for religious pilgrimage. Entitlements vary according to the type of leave and the applicable employment rules.
In Pakistan, employees are entitled to 14 calendar days of paid annual leave after completing 12 months of continuous service. Annual leave must be taken consecutively rather than split into separate periods.
Employees may carry forward unused annual leave, subject to a maximum of 14 days. This can increase the total available entitlement to 28 days, or up to 30 days in certain circumstances. Employees may also request payment instead of leave.
Employees receive their full wages during annual leave. Payment is calculated using the average daily wage earned during the three months preceding the leave period. The employer must pay half of the total leave pay before the leave begins.
If the employer fails to make this advance payment, the employee may file a complaint with the labour authorities. A labour inspector can assist the employee in recovering the outstanding amount.
Salary generally includes monetary compensation for work but excludes social insurance contributions, travel allowances and certain other specific payments. Minimum wage requirements vary by province and sector.
Salary may consist of several components. Basic salary is the fixed amount specified in the employment contract, excluding additional allowances. Allowances are payments provided under the contract, such as housing, travel, education, social and entertainment allowances. Additional payments include discretionary or non-recurring amounts, such as bonuses and commissions, that do not form part of regular wages or allowances.
Employees paid an annual or monthly salary must receive their wages at least once a month. In factories, railways and other establishments employing fewer than 1,000 people, wages must generally be paid within seven days of the end of the wage period. In establishments employing more than 1,000 people, payment may be made within ten days.
Wages must be paid on a working day in current coins or currency notes. Cheque payments are not permitted.
Pregnant employees are entitled to receive their full wages during delivery leave. Employees who take delivery leave with full pay are also entitled to their regular wages for any annual leave taken within the same year.
Employees who work beyond standard working hours, more than eight hours per day or 48 hours per week, are entitled to overtime pay at twice their normal rate. In seasonal factories, overtime applies only when working time exceeds 50 hours per week.
Employees required to work on a public holiday are entitled to 300% of their normal wages, a paid substitute holiday and one day of compensatory leave.
To calculate the salary and taxes in Pakistan, click here.
Sick leave entitlements in Pakistan vary between the government and private sectors, as well as by province and the nature of the illness.
In the government sector, employees who have contributed to the social security fund for at least 90 days during the preceding six months are entitled to sickness benefits for the duration of their illness. For serious illnesses such as tuberculosis and cancer, employees may receive full wages for up to 365 days within a year.
However, in Khyber Pakhtunkhwa and Balochistan, this entitlement is limited to 50% of wages. For other illnesses, employees are entitled to 75% of their wages for up to 121 days per year, with the same 50% wage limit applying in these two provinces.
In the private sector, employees are entitled to 10 days of sick leave when hospitalisation is not required. If hospitalisation is necessary, they may take up to an additional 30 days of sick leave.
For prolonged illnesses, including mental health conditions and serious diseases such as tuberculosis, cancer and heart disease, employees may be granted up to six months of sick leave on full pay, followed by six months on half pay and, if necessary, a further six months of unpaid leave. This arrangement requires certification from a registered panel clinic.
In addition to 14 days of paid annual leave, employees are entitled to 10 days of casual leave with full pay and 16 days of sick leave at 50% pay. Casual leave is intended for unexpected circumstances, such as sudden illness, and requires a medical certificate under the provisions described here.
Sick leave must be supported by a medical report covering the entire period of absence, issued either by the employee’s attending doctor or by the organisation’s doctor. The employer may have the certificate reviewed by a medical examiner. Sick leave may also be extended on an unpaid basis where necessary.
Before returning to work after recovery, employees must be declared fit for duty by a medical officer.
Female employees are entitled to up to 12 weeks (three months) of maternity leave, including six weeks of compulsory leave after childbirth. In the public sector, the maternity leave entitlement is 90 days. Maternity leave is paid at full salary.
Paternity leave is less consistently provided. In Pakistan’s private sector, there is no general legal requirement for employers to provide paid or unpaid paternity leave.
Employment contracts in Pakistan can be terminated in several ways. Each type of termination has specific legal implications and procedural requirements.
Termination without misconduct (termination simpliciter) occurs when an employer ends the employment relationship for reasons other than misconduct. The employer must provide written notice or payment in lieu of notice. For permanent employees, the required notice period is one month. If the employer does not provide notice, they must pay one month’s wages instead.
Redundancy is one form of termination simpliciter and occurs when a position becomes unnecessary due to organisational changes or economic conditions. Employers must follow specific rules, including obtaining prior approval from the provincial government or labour court before terminating more than 5% of protected employees.
They must also give priority to the most junior employees within the relevant category. If the employer intends to recruit for the same positions within one year, they must notify the retrenched employees and offer them re-employment according to their length of previous service.
Termination for misconduct occurs when an employer dismisses an employee because of alleged misconduct. The employer must provide a written termination letter clearly stating the reasons for dismissal. Immediate dismissal without notice may be permitted where there is sufficient evidence of misconduct, such as proven dishonesty, wilful negligence or insubordination.
Before terminating employment on these grounds, the employer must follow the prescribed statutory procedure, including investigating the allegations and allowing the employee to present their defence.
Automatic termination occurs in specific circumstances without the need for formal notice or additional termination procedures. Examples include the employee’s death, the completion of a project or the expiry of a fixed-term contract.
Resignation occurs when an employee voluntarily leaves their job, whether to pursue other opportunities, because of unsatisfactory working conditions, due to a material breach of contract by the employer or for personal reasons. Notice is generally not required unless the employment contract specifies otherwise.
Employer-initiated termination may be based on grounds that are considered fair or unfair. Employers must provide a written explanation for the termination. Although the ICEO requires employers to state their reasons, it does not specify which grounds are acceptable. Judicial interpretations have recognised reasons such as serious illness or inefficiency in job performance. Employers must comply with the applicable notification requirements and procedures to ensure that the termination is lawful.
Termination by mutual agreement occurs when the employer and employee agree to end the employment relationship. The agreement may be made in writing or verbally, with the consent of both parties.
For employees who are not covered by special industrial or commercial employment legislation, an employer may terminate the employment contract without giving a specific reason, provided the contract allows for this. Employees protected under the Industrial and Commercial Employment (Standing Orders) Ordinance (ICESO) are subject to stricter termination requirements.
For employees covered by the ICESO, the employer must issue a written termination order that explicitly states the reason for dismissal. This requirement applies to both ordinary terminations and dismissals for misconduct.
Although the law requires employers to specify the reason for termination, it does not define all acceptable grounds for dismissal beyond misconduct. Court decisions have recognised reasons such as serious illness, inefficiency in job performance and the business’s economic needs.
Employers are not required to notify government authorities or trade unions about a dismissal unless this obligation is specified in the employment contract or a collective agreement. There is no general statutory right to re-employment or an offer of alternative work unless specific redundancy rules apply.
However, courts may order the reinstatement of employees covered by the relevant legislation if their termination is found to be wrongful.
In Pakistan, either party may terminate an employment contract by giving one month’s notice. If notice is not provided, the terminating party must pay the other party one month’s wages in lieu of notice. This requirement applies only to permanent employees.
Temporary workers, badlis (substitute workers) and employees on probation are not entitled to notice or payment in lieu of notice when their employment is terminated.
Employees who resign must also provide 30 days’ notice or pay 30 days’ wages in lieu of notice. Employers must issue written notice that clearly states the reasons for termination.
If an employment contract specifies a notice period longer than the statutory minimum, the contractual terms apply. Fixed-term contracts may also include specific termination clauses that take precedence over the general requirements.
Employees who believe they have been dismissed arbitrarily or without the required notice or procedures may file a complaint with the Ministry of Labour. The Ministry will attempt to mediate an amicable settlement between the parties. If mediation is unsuccessful, it may authorise the employee to take the case to the Labour Courts.
Employees may also submit a written grievance to their employer concerning any right guaranteed by law, an award or a settlement. The grievance may be submitted directly or through a shop steward or Collective Bargaining Agent (CBA), and must be filed within one month of the date on which the cause of the grievance arises.
Once the grievance has been submitted, the employer must provide the employee with a written decision within 15 days.
If the employer fails to issue a decision within this period, or the employee is dissatisfied with the decision, the employee may refer the matter to the Labour Court within two months.
In Pakistan, employees whose employment is terminated for reasons other than misconduct are generally entitled to severance pay. This is typically calculated as 30 days’ wages for each completed year of service, including any additional period exceeding six months. The payment provides financial support as employees transition out of the organisation. Severance pay does not apply when employment is terminated for misconduct.
Severance pay is calculated using the employee’s gross wages, including regular allowances but excluding irregular payments such as bonuses. Only periods of service exceeding six months are included in the calculation. If a dispute arises over payment, employees may submit a claim to the Workmen’s Compensation Commissioner within three years.
In Pakistan, the probationary period typically lasts three months. During this period, either party may terminate the employment contract without prior notice or compensation. However, employees remain entitled to wages for the days they have worked.
The parties may agree to a shorter probationary period or exclude it altogether. Where the employment contract specifies different terms, those terms take precedence over the general labour regulations.
Intellectual property (IP) rights protect creative works and inventions in Pakistan. The main legislation governing these rights includes the Copyright Ordinance 1962, the Patent Ordinance 2000 and the Trade Marks Ordinance 2001.
The Copyright Ordinance 1962 protects creative works such as books, music and films. Copyright protection arises automatically when an original work is created, without the need for registration. However, registering a work can help establish ownership and support a claim in court if a dispute arises.
The Patent Ordinance 2000 governs the protection of inventions, including new products and processes. To qualify for a patent in Pakistan, an invention must be new, useful and non-obvious. Once granted, a patent lasts for 20 years, giving the patent holder exclusive rights to the invention.
Trademarks include symbols, names and logos used to distinguish products or services. The Trade Marks Ordinance 2001 protects these identifiers against unauthorised use by others. A registered trademark is protected for ten years and can be renewed, helping businesses maintain their distinct identity in the market.
Pakistan is a party to international treaties, including the Berne Convention and the Paris Convention. These agreements support the protection of Pakistani intellectual property rights in other countries and provide protection in Pakistan for intellectual property belonging to creators from other participating countries.
In Pakistan, data privacy is primarily protected under the Penal Code, which criminalises the unauthorised use or disclosure of personal data. Individuals who believe their data privacy rights have been violated may seek legal redress under the Civil Code, including compensation, damages or court orders to stop the infringement.
The Personal Data Protection Bill extends its scope beyond Pakistan’s borders. It requires data controllers and processors that are not registered in Pakistan to appoint a representative within the country. The bill covers the collection, storage, use and destruction of personal data, whether these activities are carried out manually or through automated systems.
The bill defines several key terms:
Restrictive covenants are clauses in employment contracts designed to protect an employer’s business interests. They may prevent employees from working for competitors, establishing competing businesses, or engaging with the employer’s customers and suppliers after leaving the organisation.
Courts in Pakistan may enforce non-compete clauses by issuing injunctions requiring former employees to comply with the restrictions set out in their contracts.
To be enforceable, these covenants must be reasonable and intended to protect the employer’s legitimate business interests. These may include confidential information and trade secrets to which the employee had access during their employment.
Before the devolution of federal responsibilities in June 2011, both the Ministry of Labour and Manpower and the Ministry of Women Development had developed a policy for home-based workers. Following devolution, responsibility for implementing this policy shifted to the provinces.
The Sindh Home-Based Workers Act was enacted on 9 May 2018, while Punjab introduced its Home-Based Workers Act in 2023. Khyber Pakhtunkhwa and Balochistan passed their respective home-based workers laws in 2021 and 2022.
Under the National Policy on Home-Based Workers, a home-based worker is defined as someone who:
This definition is broader than the one under ILO Convention C177, which Pakistan has not ratified and which covers a more specific category of home-based workers.
However, the National Policy excludes the following groups from the definition:
Employers, including contractors and intermediaries, have specific obligations towards home-based workers. They must pay all wages due in accordance with the applicable legislation and maintain accurate payment records. These records must be submitted to the Labour Department or the Home-Based Workers Council to ensure transparency and compliance.
Employers must also provide the benefits required by law, including social security, medical and maternity benefits, as well as other applicable compensation.
The Home-Based Workers Council oversees the sector by monitoring home-based workers across different economic sectors and ensuring their identification and registration. It is responsible for registering both workers and employers and maintaining detailed records.
At the national policy level, home-based workers are entitled to equal treatment in terms of wages and benefits, ensuring that they receive fair compensation comparable to that of other employees. The government also supports their economic advancement by providing skills training and facilitating access to credit, land ownership and other assets.
Home-based workers who make regular contributions to the Employees’ Old-Age Benefits Institution (EOBI) are also eligible for social security benefits.
Home-based workers in Pakistan are entitled to the same rights and protections as employees working in office-based settings.
Employers must provide clear instructions and training on workplace safety. New employees must be informed of any job-related hazards and the safety measures they need to follow. Employers must also ensure safe access to work areas and comply with applicable health and safety regulations.
Home-based workers are entitled to a safe working environment, social security benefits and registration as home-based workers.
Employers should also address the provision of necessary work equipment and reimbursement for work-related technology expenses through formal agreements with employees.
Hiring employees from Pakistan offers numerous advantages, particularly in terms of cost, talent, and operational efficiency. Salaries in Pakistan are significantly lower than those in many developed countries, making it an attractive option for businesses aiming to reduce labour costs while still receiving high-quality work.
Despite the more affordable wage structure, Pakistan has a well-educated and skilled workforce, especially in IT, software development, engineering, finance, and customer service sectors. Many professionals in Pakistan are proficient in English, especially in major cities, which facilitates clear communication and effective collaboration with international teams.
The country’s strategic location and time zone further enhance its appeal, providing businesses with the opportunity for extended working hours and real-time communication with teams worldwide.
Furthermore, Pakistan’s growing tech industry and expanding digital infrastructure create an environment conducive to remote work, allowing businesses to access a global talent pool. Overall, hiring from Pakistan enables companies to tap into a talented, cost-effective workforce that can help drive business growth and maintain high standards of quality and performance.
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