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Global HR Compliance in Bangladesh

Bangladesh has evolved into a key employment hub in South Asia, driven by growth in manufacturing, IT, financial services, and telecommunications. Its labour market offers both competitive talent and operational reach across the region, but compliance requirements remain formal and highly procedural.

Employment in Bangladesh is regulated by the Bangladesh Labour Act 2006 (amended through 2018) and the Labour Rules 2015, which define contract types, working hours, leave, termination procedures, and benefit entitlements. The framework is rule-based and leaves little room for informal or undocumented arrangements.

For global employers, compliance depends on correctly classifying employment, issuing written contracts, and maintaining statutory records. Errors in these areas can result in fines, disputes, or blocked work permits for expatriates.

Acumen International supports companies entering or operating in Bangladesh by structuring lawful employment through our Global Employer of Record (EOR) framework. We help clients map total employment costs, manage payroll and benefits, and ensure each stage of the global employment journey — from onboarding to termination — meets local legal requirements.

Why Companies Hire International Talent in Bangladesh

Bangladesh attracts international employers seeking both cost efficiency and specialised expertise. The country offers a large, English-speaking workforce, competitive wages, and growing capability across sectors such as technology, shared services, logistics, and manufacturing supply chains.

Common Hiring Drivers

Market expansion
Companies often hire local sales or operational staff to represent their products and services in Bangladesh before establishing a permanent presence.

Specialised skills
Foreign professionals are engaged where technical or management expertise is scarce locally — for instance, in IT architecture, engineering, or financial compliance roles.

Project delivery
Many international firms employ contractors or fixed-term staff to execute donor-funded or infrastructure projects that require short-term deployment and strict compliance oversight.

Hiring in Bangladesh Without a Local Entity

Establishing a legal entity in Bangladesh can take several months and requires local incorporation, tax registration, and multiple government approvals. For companies that need to hire quickly or test market potential, this can delay operations and increase compliance risk.

Acumen International enables you to hire employees in Bangladesh without setting up an entity through our Global Employer of Record (EOR) solutions.
We act as the local employer of record, managing employment contracts, registration, payroll, and statutory compliance on your behalf, while you retain full control over daily work direction and performance.

This model is particularly effective for:

  • Rapid onboarding of local or expatriate staff before full market entry;
  • Short- or medium-term project delivery in regulated sectors;
  • Testing new operations or sales channels without long-term infrastructure commitments.

Acumen ensures that each employment relationship is registered, documented, and fully compliant with the Bangladesh Labour Act and related regulations, allowing your organisation to focus on business delivery while staying within legal boundaries.

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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