Employ Candidates Compliantly in
Bangladesh

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Global HR Compliance in Bangladesh

Bangladesh has emerged as a growing talent hub in South Asia, particularly in sectors such as manufacturing, IT, and finance. However, its employment regulations are structured and formal, requiring employers to navigate detailed laws covering contract types, working hours, severance pay, and more. This guide helps you understand what’s required to hire compliantly and manage employment risks effectively.

Hiring in Bangladesh requires more than identifying the right candidate. The country’s labour laws are detailed and formalised, with specific rules for employment types, benefits, and termination procedures. This guide outlines key considerations for employers and offers practical insights on staying compliant while hiring or expanding operations in Bangladesh.

Why Companies Hire International Talent

  • Market Expansion: Hiring local sales professionals to represent your product or service in Bangladesh.
  • Specialised Skills: Hiring foreign professionals, often in IT or technical fields, when equivalent talent is unavailable or cost-prohibitive in your home country.

Once the candidate is selected, the question becomes how to employ them legally while managing benefits, payroll, and compliance risks. This is where Acumen International’s Employer of Record (EOR) solution offers an efficient, compliant approach.

Hiring in Bangladesh Without a Local Entity

Companies expanding into Bangladesh often need to hire local or foreign professionals before establishing a local subsidiary. Acumen International’s Employer of Record (EOR) service enables you to do so legally and efficiently. We serve as the legal employer, managing contracts, onboarding, payroll, and compliance on your behalf—while you manage day-to-day tasks and performance.

Types of Employment in Bangladesh

Bangladesh classifies employees based on the nature of their work and the structure of the role. These categories determine employment protections and entitlements.

Employment Classifications

  • Permanent: Employed on an ongoing basis after completing probation.
  • Probationary: Hired to fill a permanent role but undergoing evaluation.
  • Temporary: Employed for a specific task or time-limited project.
  • Casual: Engaged on an irregular basis for work of a casual nature.
  • Badli (Substitute): Replaces a permanent or probationary worker temporarily.

Contract Requirements

Although verbal agreements are legally recognised, written contracts are strongly recommended. These should include:

  • Employee details and classification
  • Role description and salary structure
  • Terms of benefits, holidays, and entitlements
  • Applicable regulations under the Bangladesh Labour Act

Probation Period

  • Clerical roles: Up to 6 months
  • Other roles: Up to 3 months
  • Skilled workers: Extendable by an additional 3 months (if performance cannot be evaluated within the initial period)

After the probation period, the employee is automatically considered permanent—even if no formal confirmation is issued.

Working Hours and Overtime

Standard Hours

  • Maximum daily hours: 8
  • Maximum weekly hours: 48
  • Permitted annual average: 56 hours/week including overtime

Overtime Rules

  • Daily maximum: 2 hours
  • Weekly limit: 12 hours
  • Annual average: Cannot exceed 56 hours/week
  • Overtime pay: 2x regular hourly rate
  • Road transport workers: Limited to 150 overtime hours per year.

Annual Leave and Holidays

Employees are entitled to paid annual leave after one year of continuous service:

  • 1 day off for every 18 days worked (industry/factory workers)
  • 1 day off for every 22 days worked (tea plantation workers)
  • 1 day off for every 11 days worked (newspaper workers)

Public Holidays

Employees are generally entitled to 11 paid public holidays per calendar year.

Sick Leave and Casual Leave

  • Sick Leave: 14 days of paid sick leave per year (half pay for newspaper workers)
  • Casual Leave: 10 days per year (fully paid)
  • Conditions: Medical certification required for sick leave exceeding 1 day.

Maternity and Paternity Leave

Maternity Leave

  • Eligibility: 6 months of continuous service
  • Leave Duration: 8 weeks before and 8 weeks after delivery
  • Pay: Full wages during the 16-week period
  • Restrictions: Not applicable for more than two surviving children

Paternity Leave

There is currently no statutory paternity leave in Bangladesh.

Termination and Notice Periods

Employee-Initiated Resignation

  • Permanent workers: 60 days’ written notice
  • Temporary workers: 30 days (monthly-rated) or 14 days (others)

Employer-Initiated Termination

Employers may terminate employees for:

  • Misconduct or criminal behaviour (no notice required)
  • Illness or incapacity (with medical certification)
  • Retrenchment (after one year of continuous service)
  • No-fault dismissal (with required notice or pay in lieu)

Minimum Notice Requirements

  • Permanent workers: 120 days
  • Temporary workers: 30 or 14 days, depending on pay structure
  • Retrenchment: 1 month (if employed for 12+ months)
  • Pay in lieu: Permitted for all notice periods.

Severance Pay and End-of-Service Benefits

Severance entitlements depend on the cause of termination and the employee’s status:

Resignation (Permanent Workers)

  • 5–9 years of service: 14 days’ wages per year
  • 10+ years of service: 30 days’ wages per year

Termination by Employer

  • Retrenchment or regular termination: 30 days’ wages per completed year or gratuity (whichever is higher)
  • Dismissal for misconduct: No severance, but statutory benefits (e.g. provident fund) still apply
  • Non-criminal dismissal with extenuating factors: 15 days’ wages per year.

Statutory Employee Benefits

Mandatory Benefits

  • Paid public holidays
  • Annual leave and casual leave
  • Sick leave
  • Maternity benefits
  • Severance pay or gratuity
  • Festival bonuses (twice a year)

Common Non-Mandatory Benefits

  • Housing allowances
  • Transport support
  • Meal or education subsidies
  • Performance bonuses or commissions.

Payroll and Tax Contributions

Employers are responsible for:

  • Income tax withholding based on progressive rates (0% to 30%)
  • Provident fund contributions (if applicable by policy or CBA)
  • Social welfare funds if the establishment is covered
  • Workers’ profit participation fund (mandatory in certain sectors).

Plan Employment Costs in Bangladesh with the Global Payroll Calculator

When budgeting for hiring in Bangladesh, gross salary alone doesn’t reflect your full liability. Use Global Payroll Calculator to:

  • Estimate total cost of employment (salary, bonuses, severance accruals, social contributions)
  • Compare Bangladesh with other markets in real-time
  • Run gross-to-net and net-to-gross payroll scenarios
  • Identify regulatory obligations before issuing an offer

This tool helps HR, finance, and expansion teams make data-backed decisions—before committing to new hires.

Hire in Bangladesh with Acumen International

Acumen International enables you to legally hire local or foreign talent in Bangladesh without setting up a local company. Through our Global Employer of Record solution, we help you:

  • Legally engage full-time employees in Bangladesh
  • Manage contracts, onboarding, payroll, and leave
  • Stay compliant with all employment, tax, and labour rules
  • Avoid risks of misclassification or procedural errors.

We act as the legal employer on your behalf — so you retain control of the work, while we ensure compliance with Bangladesh’s employment regulations.

Need to hire in Bangladesh?
Let’s help you do it fast, legally, and without the cost or delay of setting up an entity.

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