Bangladesh maintains a highly permissive foreign direct investment among South Asian countries, distinguished by its unrestricted exit policy, easy transfer of incomes and profits, and complete foreign ownership. The nation provides foreign investors with strong infrastructure facilities and logistical support, particularly in the RMG sector. More so, the country offers a wealth of talent spanning multiple sectors with a competent and diverse labour force. However, the process of hiring employees can be difficult and overwhelming. This is why, we have broken down the process of hiring employees in Bangladesh step-by-step along with the essentials of the hiring process.   

A Step-by-Step Guide to Hiring Employees in Bangladesh

Despite the high prospects of hiring employees in Bangladesh, the process of hiring employees in Bangladesh is not as easy as it seems. To hire employees in Bangladesh, you need to have an understanding of the essential factors, cost, and the process of hiring employees in Bangladesh. This blog explores the step-by-step process of hiring employees in Bangladesh. 

Essential Factors to Know Before Hiring Employees in Bangladesh 

You need to note the following factors of Bangladesh’s labour laws and employment procedure if you wish to acquire comprehensive knowledge regarding hiring employees in the country. 

Employment Contracts

Employment contracts hold significant importance within the recruitment procedure in Bangladesh. Employer and employee terms of employment are governed by a contractual arrangement. The parameters of the agreement should conform to the Bangladesh Labor Act 2006 and the Bangladesh Labor Rule 2015. In the absence of a written employment contract, a letter of employment is required. The employment contract must include working hours, nature of work, job title, salary, bonuses, compensation, probation, and termination. 

• Working Hours: The Bangladesh Labor Act 2006 imposes a daily and weekly maximum of forty-eight hours of work per employee in any establishment. An additional two hours of overtime are permitted daily. An employee is limited to a maximum of 60 hours in a week. 
• Bonuses and Compensation: Annually, employees who have completed a 12-month probationary period are entitled to two festival bonuses in the amount of the standard salary. The minimum wage in Bangladesh differs from sector to sector. The minimum salary of an apprentice in the RMG industry is Tk. 8,000 per month. The minimum compensation for apprentices in the Export Processing Zone is TK. 4,480 per month.  A worker accrues 200% of their regular compensation in overtime. The due date for payment of wages is seven days after the specified payment period. 
• Probation: Section 4(8) of the Labor Act stipulates that the duration of the probationary period is contingent upon the occupation of the employee. Probation terms for administrative personnel are six months, while all other employees are subject to three months. Provision of inadequate service during the initial three months of probation may result in an extension of the probationary period. Once the probationary period concludes, the employee is deemed qualified to be offered a permanent position with the organization. 
• Termination: If an employer wants to fire a permanent employee, they have to provide them 120 days’ notice. The notice period provided for temporary employees is thirty days. All termination benefits are due thirty days after the date of termination from the employer.

An employee is required to provide their employer with sixty days’ notice before their departure. A notice period payment is due to the employer in the event that less time is provided. Temporary employees are obligated to provide a notice period of thirty days. Following the termination of their employment, they will receive 30 days of pay for each year worked more than ten years, and 14 days of pay for each year worked over five years but less than ten. 

Work Permits

Working in Bangladesh requires all foreign nationals to possess a valid work permit. The E-visa issued by the Embassy of Bangladesh is valid for three months. Employers in Bangladesh are additionally required to register with the appropriate government authority before hiring foreign nationals. Three governmental entities in Bangladesh are principally concerned with the issuance of work permits to them. Foreign labour in the export promotion zones is regulated by the Bangladesh Export Processing Zones Authority (BEPZA). Employment permits for foreign nationals working in industrial enterprises situated beyond the processing zone are issued by the Board of Investment (BOI). Work permits for foreign nationals in non-governmental organizations are issued by the NGO Affairs Bureau of Bangladesh (NGOAB).

Foreign employers seeking to issue work permits for their personnel are required to submit to the Bangladeshi Embassy a letter of employment and a confirmation letter of concurrence from the relevant government authority. Prospective employers are required to submit an E-visa recommendation application to the BOI on behalf of their foreign employees who fall within its jurisdiction. 

Employee Benefits

Employee benefits are an essential component of the recruiting procedure. Typical examples of such benefits comprise paid leaves, maternity leave, health insurance, compensations, and so forth. 

• Paid Leave: Employees who have completed a complete year of service are entitled to completely paid annual leave. An employee may carry forward a maximum of sixty days of unused annual leave. One day of leave is granted to industrial establishments, transportation service providers, and manufacturers for every eighteen days of labour. Employees in EPZs must get a day of leave for every 22 days of work. One day off is granted to tea plantation employees for every twenty days of work. Newspaper employees are granted one day of leave for every eleven days of work. Every fourteen days of work is followed by one day off for employees under the age of 18. Also, full government holiday pay is provided to all employees. If an employee is required to work on a holiday, they will be granted two additional holidays with complete pay and an additional day off.

• Sick Leave: Except for those employed by newspapers, all employees are granted a period of fourteen days of paid medical leave. In order to be granted sick leave, employees are required to provide a medical certificate. Newspaper employees are eligible to take a half-paid medical leave for one-eighteenth of their working hours. 
• Maternity Leave: Women who have been employed by the organization for a minimum of six months are eligible to take up to eight weeks of paid leave, beginning from the day following the delivery of their child. They are granted additional maternity leave but not maternity compensation if they have two or more children. Women who have not worked for six months are eligible for unpaid leave. More so, they are prohibited from working for a period of eight weeks after the birth of their infant. Pregnant employees in EPZs are granted a leave entitlement of six weeks prior to the due date, with an additional six weeks of leave granted after the child’s delivery. An employee receives a routine salary throughout maternity leave. Maternity benefits may only be granted twice to a single employee by employers in EPZs, provided that the leave remains unused for a period not exceeding three years.

• Health Coverage: The responsibility of supervising and arranging medical treatment for an injured worker falls within the employer-employee relationship in Bangladesh. The employee is required by the Bangladesh Labor Rules 2015 to notify the Labor Court of any workplace accident. The employee is entitled to a free medical examination by a registered medical professional for three days following the receipt of notification.

In the absence of contrary evidence from the employer, an occupational sickness diagnosis that the employee acquired during employment for the company for a duration exceeding six months shall be considered an unintentional injury in the workplace. The employee must receive paid for treatment until the illness reaches a state of complete recovery. The Labor Act of 2006 provides details regarding employee compensation, including the quantity and method of payment, in addition to medical care. 

Taxation 

In Bangladesh, corporations are required to remit a corporate tax amounting to 32.5%. Bangladesh imposes a progressive payroll tax on employers, which ranges from 10% to 30%. Although social security is not officially acknowledged in Bangladesh, certain corporations have a legal obligation to contribute 5% of their earning to the Workers Profit Fund.

The following table summarizes the income tax rates for employees in Bangladesh. 

On the other hand, foreign employees are required to remit income tax at a fixed rate of 30%. Additionally, as Bangladesh doesn’t have a functional social security system, no social security contributions are remitted by Bangladeshi employees to the government. 

Employee Protection Against Discrimination 

The majority of implemented legislation relevant to the protection of workers’ rights is framed by Bangladesh’s labour laws and regulations. The constitution of Bangladesh states that every citizen is equal under the law. A business is not permitted to discriminate against workers or job applicants for reasons such as orientation, intimacy, theology, and so forth. It is advisable to refrain from questioning candidates on these subjects during interviews and to use language that is inclusive of all applicants. 

Cost of Hiring Employees in Bangladesh

The cost of hiring employees in Bangladesh varies depending on the business and the company’s rules regarding optional costs like benefits. As such, it is not feasible to give an exact number. The majority of businesses provide their workers with a number of extra advantages, such as health insurance, festival bonuses, and transportation allowances. Moreover, employers in Bangladesh incur extra expenses for job posting, interviews, employee training, and onboarding during the hiring process. So, when planning your budget for the hiring process, the extra expenses should be taken into account. 

Prospective Alternatives for Hiring Employees in Bangladesh

There are primarily two ways that foreign companies can hire employees in Bangladesh. You can either create a legal entity or employ an EOR in Bangladesh. Registering a foreign subsidiary in Bangladesh to oversee the hiring procedure may fulfill your hiring needs. However, it may be a laborious and time-consuming procedure. On the contrary, hiring a trusted EOR like Meteors has several advantages because it will handle payroll, benefits, taxes, and other HR responsibilities for your employees while making sure local labour and tax rules are followed. You can eliminate all types of hiring headaches when you work with an EOR. 

The Procedure for Hiring Employees in Bangladesh

1. Determine the Necessity for Hiring: The first step of hiring employees in Bangladesh is determining the necessity of hiring. Employers need to clearly define the position’s requirements, prerequisite experience, desired qualifications, and candidate eligibility while making sure whether the position has to be filled temporarily or entirely. 
2. Post Job Openings: Companies can post job openings online to find prospective employees or internally so that current staff members recommend candidates. 
3. Examine Candidates: After getting responses from interested candidates, you need to review the resumes to find prospective employees. Notify the eligible applicants of the next screening procedures and remove ineligible applicants from the pool of applications. To further reduce the number of candidates, schedule interviews with the shortlisted candidates.
4. Conduct Background Checks: To protect your company and confirm the qualifications of potential hires, background checks are crucial. Prior to making a final job offer, background checks usually examine a candidate’s credit report, criminal history, and career. 
5. Make the Final Choice: Finally, the hiring process will end with an assessment of candidates based on their performance in interviews and screening exams, as well as their talents, recommendations, and other pertinent data. Decide on one or more top choices and then pick a backup candidate. 

Or, you can make the whole process of hiring easy and efficient by employing an EOR, like Meteors, in Bangladesh. It will be less time-consuming and allow you to focus on more important goals and aspects of your business. Meteors will effectively streamline the hiring process while staying compliant with all laws and regulations. 

Summary

The country harbors one of the most talented and hard-working people making the country a perfect place to recruit employees. Foreign companies can capitalize on Bangladesh’s prodigious talent pool, thereby stimulating innovation and expansion. However, first one needs to understand the specifics of hiring employees in Bangladesh. This blog discusses the essential factors one needs to know before hiring employees in Bangladesh which involve employment contracts, work permits, employee benefits, taxation, and employee protection against discrimination in Bangladesh. Then it moves on to the cost and the prospective alternatives of hiring employees in the country. Finally, it covers the step-by-step process of hiring employees in Bangladesh. Now if you need help with the extensive recruitment process, Meteors is the perfect partner for you!

Frequently Asked Questions (FAQs)

Which processes are essential for hiring employees in Bangladesh?

Employment in Bangladesh necessitates the execution of various procedures, such as acquiring required approvals, formulating employment contracts, and ensuring compliance with labour legislation. 

What are the basic employment contracts used in Bangladesh?

Employment contracts in Bangladesh typically comprise provisions of confidential information, working hours, termination protocols, compensation, and benefits. Adherence to these contracts to local labour laws and regulations is a must. 

Which recruitment channels are commonly utilized to acquire employees?

Online employment boards, newspaper advertisements, and social media platforms are all examples of diverse recruitment channels in Bangladesh. You can also hire an EOR to deal with the hiring process in Bangladesh. 

What are some possible challenges that should be avoided when hiring employees in Bangladesh?

Managing employee expectations, navigating bureaucratic processes, comprehending local customs and language barriers, and ensuring compliance with ever-changing labour laws and regulations are all potential challenges that may arise when hiring employees in Bangladesh.