Employ Candidates Compliantly in Bangladesh

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  1. Overview: Bangladesh
  2. Global HR Compliance
  3. Global PEO and payroll
  4. Work permit for hiring expats via PEO
  5. Expand without a company set up
  6. Contractor vs. employee: which is better?
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Global HR Compliance in Bangladesh

If you hire international workforce, or plan to hire, then Hiring and Firing Workforce in Bangladesh Guide below will help you understand the nuances of labor legislation in the country.

There are two main reasons for companies hiring foreign workforce:

  • Expanding into foreign markets to sell company product or products there. In this case, companies hire sales representatives who would exclusively represent their product in the target market and sell it to their local client base.
  • Hiring the right foreign talent with a unique expertise, often related to IT sphere that cannot be found in the home country or that costs less compared to local specialist with similar skills.

After you have found the right candidate, the question is how to hire and provide compensation to this person so you as a business remain 100% compliant when working with global workforce. Another thing to consider is whether you want to keep the talent long-term and how you can do that.

If you need to hire foreign workforce in Bangladesh so you can expand there, then our Global Employer of Record solution may be of help. We help you legally hire and reward your foreign workforce by making them employees via a global employment outsourcing service. This is simple as employ your in-house workforce with the only difference that workers can live anywhere in the world and Acumen International would be their legal employer on your behalf. This means we would bear all employment risks, not you. Also, we manage bonuses, vacations, sick leave and can rent the office and a car for your foreign sales representatives if that is what you need.

With our solution, you can test new foreign markets before deciding whether you are going to get established there. You gain flexibility and expand with reduced costs, and easily withdraw from the unattractive countries.

We are experts in global workforce employment in Bangladesh, and our goal is to become your single provider. Instead of working with numerous local staffing agencies and legal advisors, Acumen International can solve your global business challenges and save you time, costs, and resources.

Our team of English-speaking professionals frees you from working through language nuances. Acumen International works 24/7 and can assist you whenever you need, regardless of time zones. Our goal is to create tailored labor solutions for you that are managed legally and in full compliance with the local employment laws.

With our knowledge and deep understanding of local nuances, you easily satisfy your need for skilled professionals in your global industry. With our qualified local partners, you can trust that your global workforce satisfies all local tax, social security, and immigration requirements in Bangladesh.

Hiring and Firing Workforce in Bangladesh Guide

# Employment Contracts

Types of employment agreements:

#Permanent employment contracts

  • Casual employment contracts
  • Fixed-term contracts
  • Collective Agreements

Workers employed in any establishment may be classified in any of the following classes according to the nature and condition of work, namely:

  • A badli (= transfer worker) is a worker who is employed during the absence of a permanent worker or of a probationer worker.
  • A casual worker is a worker employed on an ad-hoc basis in an establishment for work of a casual nature.
  • A probationer is a worker who is provisionally employed in an establishment to fill a permanent vacancy in a post and has not completed the period of his probation in the establishment.
  • A permanent worker is a worker employed in an establishment on a permanent basis or who has satisfactory completed the period of his probation in the establishment.

Permanent employment contracts

Typically, the letter of appointment or written contract will include:

  • Name of the worker.
  • Name of the worker’s parents.
  • Name of the worker’s spouse (if applicable)
  • Present and permanent addresses of the worker
  • Designation of the worker
  • Type of work to be undertaken by the worker
  • Date of worker joining the establishment
  • Class of the worker
  • Wages or pay scale (wages or salary and the rate of the increase of annual salary, if any)
  • Other payable financial benefits (house rent, medical expenses, education, food, conveyance, festival and attendance allowances and gratuity, if any)
  • A statement that the conditions of appointment/employment will be governed by the establishment’s existing service rules (if any) and the existing Labour Act.

Casual employment contracts

Every casual worker shall be provided with a casual card in which the days for which he has worked shall be entered.

Fixed-term contracts

Temporary worker is one who is employed in an establishment for work that is essentially of a temporary nature and is likely to be finished within a limited period. Therefore, fixed-term employment contracts are permissible under the category of ’temporary’ employment. However, the law does not stipulate a maximum duration for such employment.

  • Valid reasons for Fixed term contract (FTC) use: no limitation
  • Maximum number of successive FTCs: no limitation
  • Maximum cumulative duration of successive FTCs: no limitation.

Collective Agreements

Collective bargaining agent has the following powers:

  • To bargain with the employer in matters connected with employment, unemployment and conditions or environment of work of the workers.
  • To represent all or any of the workers in any proceedings.
  • To give notice of and declare a strike
  • To nominate representatives of the workers in any welfare institution or provident fund and in the board of trustees of the workers’ participation.
  • To conduct cases on behalf of any individual worker or a group of workers under the Labour Act.

# Employment Termination and Severance Pay (Dismissal)

Employees may terminate their employment by notifying employers. The time period for the warning varies, however, depending on whether the employee is a permanent or temporary employee.

Employer decision

An employer may dismiss a worker if the worker has been convicted of any criminal offence or if the worker has been found guilty of misconduct.

Further, a worker may be terminated from employment without any cause, by giving the prescribed notice or pay in lieu. Worker may be retrenched on the grounds of redundancy. Moreover, worker may be discharged for reasons of physical or mental incapacity or continued ill-health certified by a registered medical practitioner.

# Notice period

Worker may be dismissed (for misconduct or criminal offense) without notice or without wages in lieu of notice.  Permanent worker must be given 120 days’ notice, and a temporary worker, whose termination is not owing to the completion, cessation, abolition, or discontinuance of the temporary work for which he or she was appointed, must be given 30 days’ notice (if he or she is a monthly rated worker) and 14 days’ notice (for other workers). However, the employer may terminate any worker without notice by paying wages in lieu of notice. For retrenchment, if the worker has been in continuous service for at least one year, they must be given one month’s notice or wages in lieu of notice. For discharge, prior notice is not required.  A permanent worker can terminate his service by giving written notice of 60 days to the employer.   Where a permanent worker resigns his service, he shall be paid by the employer compensation:

  • At the rate of 14 days’ wages for his every completed year of service, if he completes 5 years of continuous service or more but less than 10 years under the employer
  • At the rate of 30 days’ wages for every completed year of service if he completes 10 years of continuous service or more under the employer.

A temporary worker can terminate his job by notifying the employer in writing of:

  • 30 days, if he is a skilled worker per month
  • 14 days, in the case of other jobs.

# Severance payments

If a worker is dismissed for misconduct on account of theft, misappropriation, fraud or dishonesty in connection with the business or property of the employer, or disorderliness, riot, arson or breakage in the establishment, he or she is not entitled to any compensation for the dismissal. If a worker who has been in continuous service for at least one year, under extenuating circumstances, is removed, instead of being dismissed for criminal conduct or misconduct, he or she will be entitled to compensation of 15 days’ wages for every completed year of service. However, a dismissed worker shall be entitled to other benefits under the Labour Act, as applicable (such as provident fund, workers’ profit participation fund and welfare fund).

If a permanent worker’s employment is terminated, he or she will be entitled to compensation of 30 days’ wages for every completed year of service or gratuity (if any), whichever is higher, in addition to any other benefit payable.

If a worker who has been in continuous service for at least one year is retrenched from his or her service, he or she will be entitled to 30 days’ wages for every year of service or gratuity (if any), whichever is higher, he or she will also be entitled to other benefits payable under the Labour Act, as applicable (such as provident fund, etc.).

# Employee Benefits and Contributions

Mandatory benefits required by law to be provided by an employer:

Festival holidays entitlement, annual leave, sick leave, casual leave, maternity leave.

Non-mandatory benefits that are offered by an employer:

Housing assistance, education subsidies, transportation allowance.

# Probationary period

Probationary period for a worker whose function is of a clerical nature shall be six months, and for other workers such period shall be three months. In the case of a skilled worker, the probation period may be extended for a further period of three months if it is not possible to ascertain the quality of work within the first three months of probation. Further, a worker shall be deemed to be a permanent worker after completion of his or her probationary period or extended period of three months even if a confirmation letter has not been issued. Therefore, apart from extending the probation period of a skilled worker for a period of three months if it has not been possible to ascertain the quality of his or her work during the initial three months, the employer may not extend the probationary period at his or her discretion.

#Overtime

Overtime is to be limited to 2 hours in any one day, 12 hours in any one week and 8 hours per week averaged over one year. For road transport workers, 150 hours of overtime per year. All workers are entitled to overtime pay.

# Work hours

The maximum daily number of hours an adult worker may be required to work is eight. The weekly maximum working hours of an adult worker is 48, while maintaining a maximum annual average of 56 hours per week.

# Annual Leave

A worker who has completed one year of continuous service in an establishment is entitled to annual leave with wages for days calculated on the basis of the works of the preceding 12 months at the following rate:

  • One day for every 18 days of work, in the case of a shop, commercial, industrial, factory or road transport establishment worker
  • One day for every 22 days of work, in the case of a tea plantation worker
  • One day for every 11 days of work, in the case of a newspaper worker.

# Sick Leave

Every worker except a newspaper worker is entitled to sick leave with full wages for 14 days in a calendar year. A newspaper worker is entitled to sick leave with half wages for a minimum of one-eighteenth of the period of his or her service.

# Parental Leave

Maternity Leave

Employers are liable to provide maternity benefits to the employee who has completed at least 6 months of service with the employer by the date of confinement. Every woman employed in any establishment shall be entitled to the payment of maternity benefit:

  • 8 weeks preceding the tentative date of her delivery
  • 8 weeks immediately following the said of her delivery.

Paternity Leave

There is no statutory paternity leave.

Acumen International can help you fast-track your possibilities of entering and expanding your business in Bangladesh by providing you with our Employer of Record services. Our unique mix of PEO/EOR solutions will enable you to jumpstart your global operations almost immediately, cost-effectively and compliantly without any need to set up a legal entity first or afterwards.

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