Taking your business past your borders to new countries can be a profitable venture for any company. When you start your expansion, though, you’ll have to contend with a new set of employment laws, tax policies, recruiting tactics, and other factors.
At Globalization Partners, we facilitate your global expansion with our team of HR and legal experts. Our Employer of Record model allows us to hire your workforce through our subsidiary and guide you through various employment processes.
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We streamline payroll, create benefits packages, and help you with onboarding, all while staying within country-specific labor laws. We do more than keep your business compliant — we take on all associated legal risks. Our team is prepared to plan around every regulation, but we’ll be ready to tackle legal issues if they arise.
We have experience in more than 185 countries, making us a valuable resource for your global expansion in Bhutan and beyond. Take a look at some of our labor law knowledge and how we’ll help you jumpstart your international development.
Bhutan’s small economy relies primarily on agriculture, hydropower, and forestry. These sectors and the country’s connection to India make it an excellent location to begin your international business venture.
Self-regulation and worker representation characterize employment laws and the business world in Bhutan. With internal service rules, employers can create requirements and provisions for employees within labor laws. Workers’ associations make it possible for employees to have representation in the workplace and find a middle ground with employers.
Bhutan labor laws require written employment contracts for service lasting a year or longer. If an employer doesn’t write out an agreement, it’s deemed an unwritten contract, and employment terms should follow all minimum requirements outlined in the law.
Employment agreements can last for a definite or indefinite period, and they must cover all information regarding the nature of the job. These details include:
- Description of the job.
- Notice periods for termination.
- Hours of work.
- Granted leave.
Employers should keep a copy of the document and provide one for the employee involved in the agreement.
Any contract will automatically break if the employer fails to pay wages or the employee is absent for more than three consecutive days without permission or reasonable cause. Employment agreements are only legally enforceable if both parties sign the document or if there’s evidence of a verbal agreement.
The standard workweek is eight hours a day and 48 hours a week. Employees are entitled to a 24-hour rest period every week, and employers should distinguish this day in the employment contract.
Overtime is optional for employees, and they can work up to two overtime hours a day or 12 a week. Workers can only work one overtime night shift a week. A company’s internal service rules determine the overtime rate, but it must be at least equal to a person’s standard rate.
After six months of service with an employer, employees will start accruing vacation days. Workers should earn one and a half vacation days a month for 18 days of leave each year. Employees should receive their regular wages for these days, and they can only use this leave once they’ve reached 12 months of service.
Employees can accrue time off for up to three years or longer if both parties agree on different terms. After the maximum accrual period, employees must forfeit their time off and begin from zero.
Employees also accrue at least five days of casual leave after six months of service. The employer pays standard wages during this time off, and it’s reserved for personal matters like bereavement or marriages in the family.
Upon six months of service, workers are also entitled to paid sick leave. All employees should receive at least five sick days a year with standard wages. Workers should provide notice for sick leave when possible or notify employers as soon as they’re able. Continuous lack of warning is grounds for employers to take away an employee’s sick leave.
If a sickness persists for longer than the allotted sick leave, employees can request to use vacation days or casual leave as a replacement for sick days.
Employees are entitled to paid time off for at least nine public holidays each year, including National Day and the anniversary of His Majesty the King. An employer may have selected holidays designated as time off in their internal service rules or leave these days off to the employees.
Other public holidays in the country may include the following:
- Nyilo (Winter Solstice)
- Traditional Day of Offerings
- Losar (New Year)
- The First Sermon of Lord Buddha
- Lord Buddha’s Parinirvana
- Druk Gyalpo Coronation Anniversary
- Blessed Rainy Day
When a company has designated holidays off, employees can replace any day with a holiday more relevant to them. If an employee chooses to work on a public holiday, they must make 50 percent extra wages for that day.
After one year of continuous employment, female employees are entitled to paid maternity leave. They must receive at least eight weeks, taken in any arrangement they choose, and they can take this leave three times under one employer.
Before taking time off, employees must provide at least eight weeks of notice for their employer. Workers should provide this notice in writing, accompanied by a medical certificate. They must also provide two weeks of notice for their return to work.
Bhutan also offers paternity leave to male employees. If any male employee is legally married to a woman having a child, he may take five days of paid leave.
Termination and Severance
Employers and employees can terminate their contract at any time with proper notice. Both parties must provide at least 30 days of warning for contract termination or payment equal to income during this period.
Specific grounds allow employers to dismiss workers without notice or pay. These grounds can include disrespecting the policies in the contract or causing other forms of harm. The labor laws list reasons for dismissal as:
- Theft, fraud, or misuse of property.
- Willful disobedience.
- Assault or another severe crime.
- Willful lack of attendance.
- Sexual harassment.
- Causing damage.
- Offending the Tsa Wa Sum — disrespecting the King.
When an employer has worked for at least five years, and their contract is terminated, not dismissed, they may be entitled to severance.
Employers must deduct income taxes and provident fund contributions from employee paychecks.
As part of the nation’s constitution, the country provides free public healthcare to all citizens. There is only one private health care institution in the capital. Health insurance schemes are not required or necessary on employers’ ends.
Bonuses and Additional Benefits
There are no additional benefits or bonuses covered in the country’s employment laws. Employers may include their own requirements in the internal service rules for their companies.
Expand Business to Bhutan With Globalization Partners
Globalization Partners has the resources you need for a successful expansion. Reach out today to learn more about our Employer of Record services.