By Globalization Partners
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Because of its bustling cities, enormous workforce, inexpensive labor costs, and growing economy, Bangladesh is an appealing location for international business expansion. Its lush natural scenery and breathtaking wildlife — including its national animal, the majestic Bengal tiger — can make living and doing business in Bangladesh a once-in-a-lifetime opportunity. The country also boasts the longest-serving eminent female head of state — its prime minister, Sheikh Hasina.
As your company expands into Bangladesh, you should become familiar with the relevant labor laws and best hiring practices. To help you, we’ve developed this guide to hiring employees in the country. We’ll discuss contract employment, explain the various costs of hiring, and offer general tips for hiring in Bangladesh.
What to know before hiring in Bangladesh
Before you start hiring, you’ll need a thorough understanding of topics like termination and severance, payroll and taxes, and leave and benefit policies, among other nuances of hiring and employment. Here are a few vital points to consider:
1. Contract employment
Employment law in Bangladesh requires employers to create formal written contracts for their employees. The contract should use the local language and define terms like these:
- Position and nature of work
- Working hours
- Termination requirements
Employees in Bangladesh go through a probationary period before receiving full termination protections. For most employees, the probationary period lasts for three months, and for clerical workers, it lasts for six. After the probationary period, companies may terminate their employees with minimal notice for a few reasons:
- Conviction of a crime or other misconduct
- Physical or mental incapacity
- Chronic medical condition as certified by a healthcare professional
- Company retrenchment to minimize losses
Employees found guilty of criminal behavior or misconduct are not entitled to notice or severance pay. Employees dismissed for medical reasons must receive 30 days of wages for each year of service to the company. Retrenched employees must receive one month’s notice and 30 days of wages for each year of service, though they may sometimes receive additional pay instead of notice.
Under all other circumstances, Bangladeshi employers that wish to terminate their employees must generally provide written 60 to 120 days of notice. These employees should also receive 30 days of wages for each year of service, though they may also sometimes receive additional compensation to shorten the notice time.
2. Payroll and taxes
Unlike many other countries, Bangladesh does not have a social security program or associated payroll taxes. Employees are merely responsible for their income taxes. Bangladesh has progressive income taxes that range from 10 percent to 30 percent.
Employers are responsible for corporate taxes — generally either a 35 percent tax if the company is a non-listed entity or a 25 percent tax if the company is a publicly listed entity. However, certain industries have different corporate tax rates. The garment industry, for instance, offers employers a low 14 percent corporate tax rate, as long as they meet specific requirements.
3. Wages and working hours
The standard workweek in Bangladesh consists of 40 working hours. Most businesses take Friday and Saturday off. Overtime is permitted, though the law caps it at 60 hours per week and a maximum yearly average of 56 hours per week. Any employee who works overtime must receive double pay for those hours.
In Bangladesh, the minimum wage varies by industry and is generally very low. For instance, workers in the garment industry typically take home only about 8,000 taka — about 94 U.S. dollars — every month. If minimum wage applies to your company, you’ll likely want to check industry guidelines to ensure compliance with the relevant labor law.
4. Time off
Bangladeshi employees typically accrue annual leave as determined by their specific industries, some of the most common of which are textile and garment production, farming, shipbuilding, tourism, communication, and technology.
Employees commonly receive one day off per every 18 days worked in a shop, factory, transportation business, or commercial or industrial establishment, for instance. Your company should check with industry experts in Bangladesh to see what requirements apply.
Most workers also receive an additional 10 paid days off each year, though employees on tea plantations do not. This paid leave expires at the end of the year — an employee who does not use the entire allotment of leave will lose it.
Bangladeshi employees receive 14 days of paid annual sick time. Newspaper employees are an exception to this rule — they may take sick days at half-pay, as long as their leave is shorter than 1/18th of their employment period to date. Employees across all industries must usually present a medical certificate to validate paid sick leave use.
Bangladesh also offers maternity leave to its employees. Pregnant employees who have worked at a company for at least six months and do not already have two or more children may take eight paid weeks off before the birth and must take an additional eight weeks after. Employees who do not meet these requirements may still take unpaid leave. Paternity leave is optional.
In addition to that paid time off, Bangladeshi employees receive 11 paid festival holidays off each year. Each company may choose eleven holidays from a longer list of official state holidays. If a company then requires an employee to work on one of those chosen holidays, it must provide a substitute holiday off, along with two compensatory paid holidays.
5. Anti-discrimination law and restrictions
Bangladesh’s constitution decrees all its citizens equal in the eyes of the law. Companies cannot discriminate against job candidates or employees for any of the following reasons:
To avoid the appearance of hiring discrimination, your company should avoid asking candidates questions about these topics during interviews and should tailor its language to ensure a welcoming environment for all employees.
Cost of hiring an employee in Bangladesh
The costs to hire employees in Bangladesh vary by industry and company policies on optional expenses like benefits and allowances. Here are some of the direct and indirect costs you can expect to incur in hiring:
- Job advertisements
- Hours spent on applicant review and interviewing
- Miscellaneous allowances
Each employee who has worked for a company for more than a year is entitled to receive two annual festival bonuses. Neither should exceed the employee’s base monthly salary.
Many companies also provide additional benefits as perks for their employees. These might include housing assistance, education subsidies, transportation allowances, or private health insurance.
Generally, insurance benefits are up to the employer. Bangladesh has a public/private healthcare system, so employees can receive public healthcare if they need to. Nongovernmental organizations often fill gaps in the healthcare system, particularly in more rural areas. Still, your company may wish to offer private insurance benefits to make your roles more attractive to job applicants.
Hiring practices in Bangladesh
Hiring someone in Bangladesh may be reasonably similar to hiring new workers in your own country. Even so, you will likely encounter some unfamiliar nuances you should prepare for. Below are a few hiring practices to consider as you get started:
- Use the local language and currency: Your new Bangladeshi employees may have studied some of your native language in school. Still, best practices suggest that you use as much Bengali as is feasible, particularly in formal documents like contracts and offer letters. In these documents, you should also give all monetary amounts in Bangladeshi taka rather than your home country’s currency. Adopting these practices helps you welcome your employees and make them feel valued, and it ensures that they will understand the essential details of their employment.
- Lean on professional networking and online job sites: As you begin recruiting in Bangladesh, you’ll want to turn to trusted recruitment methods. Both professional networking practices and online job postings can help you attract talented candidates. If you have reliable connections in the country, lean on them for advice, or get your hiring managers to attend professional career fairs or university job fairs. You will likely also want to post job advertisements online so you can draw in a wider applicant pool.
- Check Collective Bargaining Agreements (CBAs): Collective Bargaining Agreements are less common in Bangladesh than in many other countries. The primary exception is the garment industry, where CBAs have become more common in recent years and may well become stronger as the industry grows. If your business involves garments or textiles, be sure to figure out what additional CBA requirements apply to your company.
- Choose long-term partners: You want your business operations in Bangladesh to endure and thrive, so you’ll need employees who will be good long-term fits for your organization. You will likely also rely on your Bangladeshi employees for their insights into the local culture and business norms, so selecting individuals who can help your company grow and develop through the years is also a plus.
What does a company need to hire employees in Bangladesh?
Hiring new employees in Bangladesh is often a laborious, time-consuming process, especially if your company chooses to set up a subsidiary in the country.
If you elect to set up a subsidiary in the form of a limited liability company, you will need to meet several requirements:
- Designating your shareholders and directors
- Verifying your company’s official name
- Printing a clearance certificate from the Registrar of Joint Stock Companies and Firms
- Obtaining articles of association and a memorandum of association
- Opening a Bangladeshi bank account
- Obtaining encashment certificates as proof of currency exchange
- Depositing share capital roughly equal to one U.S. dollar or more
- Submitting annual, audited financial reports to the Bangladesh Income Tax Authority
These processes could take weeks and cost your business thousands of dollars. You’ll need to familiarize yourself with new laws and potentially hire lawyers to help you navigate the requirements. Working with the Bangladeshi banking system, for instance, often proves challenging for international companies because many banks struggle with global business transactions.
Alternatively, you may choose to work with Globalization Partners’ global employment platform to help your company streamline and expedite your operations, recruitment, and hiring. Through our AI-driven technology, staying compliant with the country’s regulatory requirements is easy. Our platform will help you navigate the bureaucratic requirements of hiring and onboarding new employees so you can focus on the main business aspects of your new venture.
Hiring remote employees in Bangladesh
As you recruit and consider applicants, the distance to Bangladesh may mean that you speak with your top candidates remotely rather than in person. Here are a few tips for a successful process:
- Practice with your technology: Even from many time zones away, you’ll want to make a good impression on your Bangladeshi job candidates. If you use your remote communication platform infrequently, be sure to test it before the interviews. That way, you can work out any internet issues and turn off any unwanted filters in advance to present a polished, professional image.
- Make scheduling easy: Your Bangladeshi applicants are likely just as busy as you are. Sending a flurry of emails back and forth as you try to nail down interview times across time zones may take substantial time out of your day and theirs. Instead, consider using appointment-setting software so your candidates can choose from a list of possible times. You’ll likely save time and boost your productivity, and your applicants will appreciate the convenience.
- Focus on straightforward communication: Using web-based interview platforms can sometimes exacerbate communication challenges, especially if the audio quality lapses. Be clear and direct while also communicating your respect and appreciation for your candidates, and the conversation will likely flow smoothly.
- Make direct contact: Even if your interview process takes place remotely, your company may want to send high-level executives to the Bangladeshi work site to greet and orient your new employees as a team. This in-person contact will make your new hires feel welcomed, build unity and alignment, and get your new enterprise off to a positive start.
- Make your first new hires count: As your company expands into Bangladesh, your first new hires will set the tone for your growing team. You likely already put significant time and effort into finding the best people for your international operations, and you’ll want to redouble those efforts as you get started with remote hiring in Bangladesh. Look for candidates who align with your company’s core values, as well as those who can bring flexible skills, leadership, and diversity to your team.
Trusted international technology from Globalization Partners
When your company is ready to expand its operations, turn to Globalization Partners.
When you work with us, we shoulder the work of setting up your company and getting your hiring practices in order. Using our AI-driven global employment platform, you no longer have to handle recruiting, hiring, and onboarding for all your new employees, saving you time and labor. We also have extensive experience in navigating complicated legal and tax requirements, so we can offer you the peace of mind of knowing your practices are compliant.