Hiring guide in Bangladesh

What should I know about hiring in Bangladesh?

In Bangladesh, businesses must navigate a complex landscape of employment rules and regulations to ensure compliance and avoid penalties. Adhering to local legislation is essential for maintaining a smooth operation and fostering a productive workforce.

Key aspects include compliance with minimum salary requirements, which mandate that businesses pay employees at least the legally defined minimum wage. Additionally, companies must respect the maximum allowable workweek length to avoid overworking employees and potential legal issues. Proper management of employee benefits is also crucial. This involves providing mandatory benefits such as health insurance and paid leave, as local laws stipulate. Ensuring these benefits are correctly administered helps maintain legal compliance and employee satisfaction.

Ultimately, a thorough understanding of Bangladesh’s employment laws, including regulations on work contracts, termination procedures, and worker rights, is vital. This knowledge helps businesses stay within legal boundaries while laying the groundwork for a successful and compliant workforce.

Why is Bangladesh a good choice for finding remote employees?

The attractive mix of a large and young workforce, lower costs, excellent English proficiency, and cultural compatibility makes Bangladesh a good alternative for sourcing remote workers. Because of its progressive policies in education and technology, the country is home to an extensive and expanding labour force.

Therefore, many qualified and experienced workers in Bangladesh are looking for remote job chances with foreign businesses. Communication with clients and coworkers from other countries is simple due to the country’s substantial English-speaking population.

In addition, many employees in Bangladesh have gotten training in cutting-edge technologies, making them ideal candidates for remote work in industries like software development, information technology, and digital marketing.

How can Native Teams help you hire in Bangladesh?

Native teams can greatly assist in complying with the many rules and regulations that must be met when doing business in Bangladesh. In addition, when recruiting and supervising remote workers in the country, our team has you covered and can offer you the required assistance through our Employer of Record services.

Our team of skilled tax and legal professionals acts as your trusted partner throughout the recruitment journey in the country. We ensure adherence to local payroll requirements, tax obligations, and HR documentation, allowing you to efficiently hire and integrate Bangladeshi talent into your remote team.

Hire your first Bangladeshi employee with Native Teams.

Legal requirements for hiring in Bangladesh

Employers must follow a few essential laws and regulations to ensure a fully compliant employment process in Bangladesh.

Legal framework

Types of employment contracts

Employment contracts come in various forms in Bangladesh, each serving different needs and purposes within the workplace. The most common types include:

1. Permanent Contracts: These contracts are designed for employees who have a long-term, ongoing relationship with the employer. 
2. Temporary Contracts: Temporary contracts are used for employees hired for a specific period or project. 
3. Part-Time Contracts: Part-time contracts are for employees who work fewer hours than full-time employees. 
4. Fixed-Term Contracts: These contracts are for employees hired for a specific term or project with a clearly defined end date. 
5. Casual Contracts: Casual contracts are for employees who work as needed, often without a fixed schedule. 

Each type of contract must comply with the Labor Act, 2006, and other relevant employment laws in Bangladesh, ensuring that terms are clear and fair to both parties involved.

Content of an employment contract

An employment contract in Bangladesh should clearly define several key aspects of the employment relationship. It must include the employee’s job title, a detailed description of their duties, and the duration of employment, specifying whether it is permanent, temporary, or for a fixed term. The contract should outline working hours, salary or wage details, and any additional benefits like health insurance or bonuses. 

Leave entitlements, such as annual, sick, and maternity leave, and the procedures for applying for leave should be specified. It is essential to include terms related to notice periods, termination conditions, and any confidentiality or non-compete clauses, if applicable. Additionally, the contract should detail the dispute resolution process and specify that it is governed by Bangladeshi law, including the jurisdiction for any legal matters.

Download a free employment contract for Bangladesh through Native Teams.

Oral, written or electronic employment contracts

In Bangladesh, employment contracts can be oral, written, or electronic. Written contracts are the most formal and preferred, providing clear documentation of terms, benefits, and conditions, which helps avoid disputes. 

Oral contracts, while legally binding, are less formal and can lead to misunderstandings due to the lack of documentation. 

Electronic contracts are increasingly accepted if they meet legal standards and provide a verifiable record of the agreed terms. Each type has its uses, but written contracts are generally recommended for their clarity and legal protection.

Probationary period

In Bangladesh, a probationary period is commonly included in employment contracts to allow both the employer and the employee to assess the suitability of the employment arrangement. During this period, which typically lasts from three to six months, the employee’s performance, conduct, and overall fit with the organisation are evaluated. The terms of the probationary period, including its duration, performance expectations, and any special conditions, should be clearly outlined in the employment contract.

Working hours 

In Bangladesh, working hours are regulated by the Labor Act, 2006. The standard working hours are typically 8 hours per day and 48 hours per week. This generally means a 6-day workweek, with a maximum of 8 hours daily. Employers must also provide breaks during work hours, usually including a meal break. 

The specifics can vary depending on the industry and the terms outlined in individual employment contracts. Still, all arrangements must comply with legal requirements to ensure fair labour practices and worker rights.

Breaks and night work

In Bangladesh, regulations regarding breaks and night work are designed to ensure the well-being and safety of employees. For standard working hours, employees are entitled to rest breaks. Typically, a workday of 8 hours should include a meal break of at least 30 minutes. Additional short breaks may be required depending on the nature of the work and workplace policies.

Regarding night work, which generally refers to work performed between 10 p.m. and 6 a.m., there are specific regulations to protect workers. Employers must adhere to legal provisions that ensure night workers receive appropriate compensation, rest periods, and health and safety measures. The Labor Act, 2006 stipulates that night work must not adversely affect employees’ health and safety, and special considerations are often required for women and young workers, including restrictions on their participation in night shifts.

Annual leave

In Bangladesh, annual leave entitlements for employees are governed by the Labor Act, 2006. Employees are generally entitled to a minimum of 14 days of paid annual leave per year after completing one year of service. This leave is intended for rest and recuperation and should be taken at times mutually agreed upon by the employer and the employee.

Employers are required to provide annual leave in accordance with the law, and any unused leave may be subject to specific company policies regarding carry-over or forfeiture. Additionally, employees are often entitled to other forms of leave, such as sick leave and public holidays, which should be considered alongside annual leave in the overall leave policy.

Public holidays

1. Victory Day (Bijoy Dibosh) – December 16
2. Independence Day (Swadhinata Dibosh) – March 26
3. International Mother Language Day – February 21
4. Bengali New Year (Pohela Boishakh) – April 14
5. Eid-ul-Fitr – Celebrated at the end of Ramadan, the exact date varies each year based on the lunar calendar.
6. Eid-ul-Adha (Bakri Eid) – Celebrated approximately 70 days after Eid-ul-Fitr, it involves the ritual sacrifice of animals and is observed by Muslims worldwide.
7. Durga Puja – September-October 
8. Christmas Day – December 25
9. Buddha Purnima – Date varies according to the lunar calendar: Marks the birth, enlightenment, and death of Gautama Buddha.
10. Janmashtami – Date varies according to the lunar calendar: Celebrates the birth of Lord Krishna, a major Hindu deity.
11. Shab-e-Barat – The date varies according to the lunar calendar. 
12. Eid-e-Milad-un Nabi – The date varies according to the lunar calendar.

Cultural and Regional Festivals:

1. Rath Yatra – June or July
2. Poush Mela – January 
3. Noboborsho – Bengali New Year celebration with fairs and cultural events.
4. Chaitra Sankranti – March

Salary

In Bangladesh, wages and contributions are governed by a variety of regulations designed to ensure fair compensation and social security for workers. The minimum wage structure varies across different industries and is subject to periodic reviews by government bodies. For example, the minimum wage in the garment sector, which employs a significant portion of the workforce, is determined by a Wage Board and includes components such as basic pay, house rent, and medical allowances. This structure aims to provide a baseline standard of living for workers.

Wages are typically paid on a monthly basis, though some sectors may have different payment schedules. Employers are legally obligated to ensure that wages are disbursed on time, as stipulated in employment contracts. This timeliness is crucial to maintaining financial stability for employees.

To calculate the salary and taxes in Bangladesh, click here.

Sick leave

In Bangladesh, sick leave policies are regulated under the country’s labour laws and employment contracts, aiming to provide workers with adequate time to recover from illness or injury. According to the Bangladesh Labour Act, workers are entitled to sick leave, though the specifics can vary depending on the industry and the employer’s policies.

Generally, employees in Bangladesh are entitled to a certain number of paid sick leave days per year. The standard provision is for up to 14 days of paid sick leave annually.

Parental and maternity leave

Maternity leave in Bangladesh is governed by the Bangladesh Labour Act. Female employees are entitled to a minimum of 16 weeks of maternity leave, which includes 8 weeks before the expected date of delivery and 8 weeks after childbirth. During this period, employees are generally entitled to receive full pay. Additionally, female workers are entitled to paid leave for antenatal and postnatal medical care, usually up to a maximum of 2 hours per day, as long as it is within the 16-week period.

The Bangladesh Labour Act does not provide explicit guidelines for paternity leave, so it often depends on the employer’s policies.

Termination of the employment relationship

In Bangladesh, termination of employment is regulated by the Bangladesh Labour Act. For voluntary resignation, employees must give notice, usually one to three months, depending on their contract.

For involuntary termination, employers must provide a valid reason, such as poor performance or redundancy, and issue a formal notice or payment instead of notice. If the termination is due to misconduct, employers must conduct a fair investigation and give the employee a chance to respond.

Employees are entitled to severance pay, any outstanding wages, and accrued benefits upon termination. The process aims to ensure fairness for both parties.

Ordinary dismissal by the employer

In Bangladesh, ordinary dismissal by an employer is governed by the Bangladesh Labour Act, which sets out the procedures for terminating an employee’s contract for reasons other than misconduct or redundancy.

To dismiss an employee ordinarily, the employer must provide a valid reason and adhere to the notice period stipulated in the employment contract, which typically ranges from one to three months. If the employer does not provide notice, they must compensate the employee with payment in lieu of notice.

The employee is also entitled to receive any outstanding wages, accrued leave, and other benefits up to the date of dismissal. Employers must ensure that the dismissal is conducted in a fair manner, respecting the terms of the contract and legal requirements.

Notice period and challenging the dismissal

The notice period for ordinary dismissal is specified in the employment contract and typically ranges from one to three months in Bangladesh. Employers must adhere to this notice period or provide payment in lieu of notice if they choose to terminate the employment without notice. Conversely, employees who wish to resign are also required to give notice according to the terms of their contract.

Rights and obligations of unemployed individuals

In Bangladesh, unemployed individuals have specific rights and obligations. While there are no government-provided unemployment benefits, those who are dismissed from their jobs are entitled to severance pay and any outstanding wages or benefits as outlined in their employment contracts and the Bangladesh Labour Act. They also have legal avenues to challenge unfair dismissals; they can file complaints with the Labour Court or the Department of Labour if they believe their termination was unjust. 

On the other hand, unemployed individuals have an obligation to actively seek new employment, although there is no formal requirement to prove job search efforts. Compliance with legal procedures is also essential, especially if they are claiming entitlements or challenging a dismissal, requiring adherence to deadlines and proper documentation. Additionally, engaging in skill development and training is encouraged to improve employability and increase the chances of securing suitable job opportunities.

Severance pay

Severance pay is required when an employer terminates an employee’s contract under certain conditions, such as redundancy or company restructuring in the country. The amount of severance pay is typically calculated based on the employee’s service length and employment contract terms. Generally, severance pay is equivalent to at least one month’s salary for each year of service, although specific agreements or company policies might offer more favourable terms.

Probationary period

The probationary period for new employees is typically defined as the initial phase of employment during which their performance and suitability for the role are assessed. According to Bangladeshi Labour Rules, this period generally should not exceed six months. During this time, either the employer or the employee may terminate employment with or without notice, and the employee is not entitled to certain benefits available to permanent staff until the probationary period is completed.

Prohibition of competition 

Under Bangladeshi law, non-compete clauses must be reasonable in scope, duration, and geographical area to be enforceable. They should not impose undue restrictions on an individual’s ability to earn a livelihood. Courts generally review these clauses to ensure they are not overly broad or restrictive. For a non-compete clause to be enforceable, it must be designed to protect legitimate business interests without excessively limiting the former employee’s opportunities.

Remote working policy

A remote working policy in Bangladesh outlines the guidelines and expectations for employees who work from locations outside the company’s main office. As remote work becomes increasingly common, especially in the wake of technological advancements and global shifts in work practices, having a clear and comprehensive policy is essential.

The policy typically defines eligibility criteria for remote work, including job roles that can be performed effectively from a remote location. It specifies the conditions under which employees can work remotely, such as the need for a reliable internet connection, appropriate workspace, and adherence to work hours. Additionally, it outlines the responsibilities of employees, including maintaining productivity, meeting deadlines, and being available for meetings and communications during designated work hours.

Responsibilities within a remote work arrangement

In a remote work arrangement, employees are expected to maintain the same level of productivity and professionalism as they would in a traditional office setting. According to Bangladeshi Labour Rules, employees must ensure they have a suitable workspace that allows them to perform their duties effectively and securely. They are responsible for managing their work schedule in alignment with company expectations and are required to maintain regular communication with their supervisors and colleagues to ensure coordination and accountability.

Health and safety at home

In Bangladesh, regulations concerning health and safety at home, particularly for remote work, are not as explicitly defined as in some other countries, reflecting a need for more comprehensive guidelines tailored to this evolving work arrangement. However, there are general principles and regulations that can be applied to ensure a safe working environment.

The Bangladesh Labour Act primarily addresses workplace health and safety issues within traditional office settings and industrial environments, but its principles can be adapted to remote work contexts. Key considerations include ensuring that employers and employees adhere to best practices for ergonomics and safety even when working from home. Although specific regulations for home offices are not detailed in the Labour Act, the Act mandates that employers must ensure the overall well-being of their employees, which can be interpreted to include remote working conditions.

Intellectual property rights

Intellectual property created by an employee during their employment period is considered the employer’s property unless otherwise agreed upon in writing. The Bangladeshi Labour Rules stipulate that the employer owns any inventions, designs, or other intellectual property resulting from an employee’s work-related activities or utilising the employer’s resources. Employees are required to assign all rights, title, and interest in such intellectual property to the employer.

Employee data privacy

Employee data privacy is governed by strict guidelines under Bangladeshi Labour Rules, ensuring that personal information collected by the employer is handled with confidentiality and used solely for employment-related purposes. Employers must implement measures to protect employees’ personal data from unauthorised access or disclosure. Employees have the right to access the data held by the employer and request corrections if inaccuracies are found.

What are the advantages of hiring employees from Bangladesh vs other countries?

Hiring employees from Bangladesh offers several advantages compared to hiring from other countries, which can be particularly appealing for companies looking to optimise costs, access a skilled workforce, and benefit from specific regional advantages.

One of the primary advantages is cost-effectiveness. Bangladesh is known for its relatively low labour costs compared to many other countries, which can significantly reduce business operational expenses. This is particularly beneficial for companies looking to manage their budgets while still maintaining a strong workforce.

Additionally, Bangladesh has a growing talented workforce with a significant number of skilled professionals in various sectors, including information technology, textiles, and customer service. The country has a strong emphasis on education and vocational training, producing a pool of qualified candidates who are proficient in both technical and soft skills.

English proficiency is another key advantage. While English is not the native language, many Bangladeshis are fluent in it, especially in business and technical contexts. This facilitates smoother communication and collaboration with international clients and teams.

Furthermore, Bangladesh has a strong work ethic and a growing focus on improving workplace practices. Many employees are highly motivated and dedicated to their work, which can contribute positively to a company’s productivity and overall performance. Finally, there are government incentives for businesses that set up operations or hire locally in Bangladesh. These incentives can include tax benefits, financial subsidies, and support for infrastructure development, which can further enhance the cost advantages of hiring from the country.

Why use Native Teams for hiring in Bangladesh?

Native Teams lets you employ team members ‘like a local’ meaning you get all the benefits of a global team, wherever you are based. Here are the reasons why you should use Native Teams for hiring:

• No paperwork: We will handle all the necessary paperwork for you.
• Save on taxes: We help you handle your taxes.
• No company set up: You can expand your business using our company entitles.
• Online onboarding: We’re here to ensure your onboarding process is trouble-free.
• No accounting: We will handle all of your accounting needs, including invoicing, payroll, and more.
• Increase your profit: We assist you in growing your business and maximizing your profits.
• Compliance expertise: we can assist your company in navigating the regulatory environments and ensure you meet all relevant requirements.
• Local support: We can assist you in understanding and complying with the relevant local laws.