Why Do You Need to Know About Bangladeshi Employment Solutions?

Knowing about Bangladeshi employment solutions is essential for businesses, investors, and entrepreneurs who are operating or planning to establish a presence in Bangladesh.

The country has its unique set of employment laws, regulations, and workforce dynamics, and understanding these aspects is crucial for maintaining compliance, avoiding legal complications, and also ensuring smooth business operations.

Bangladeshi employment solutions encompass legal frameworks, contractual agreements, employee rights, and obligations. Moreover, a comprehensive understanding of these solutions enables organizations to navigate the employment landscape efficiently.

However, employment solutions also make informed decisions, manage HR effectively, and create a conducive working environment. It helps foster positive employer-employee relations, maximizing productivity, and leveraging the local talent pool to achieve business objectives.

Why Do Startups Choose Employment Solutions?

Startups opt for employment solutions as they offer a strategic advantage in managing operational complexities associated with human resources, allowing startups to concentrate on their core business objectives and innovation.

Employment solutions provide startups with access to expert advice and services in areas such as recruitment, payroll, compliance, and employee management, alleviating the administrative burden and mitigating legal risks associated with non-compliance to labor laws

Moreover, they facilitate a streamlined and efficient approach to HR management, enabling startups to quickly adapt to changes in the business environment and scale operations effectively.

However, the flexibility and efficiency provided by employment solutions are pivotal for startups that are typically resource-constrained and operate in fast-paced and competitive markets, allowing them to optimize their workforce and drive organizational success.

How Does Global Employment Solutions Work in Bangladesh?

Payrollbangadesh offers worldwide employment solutions as well as professional employment organization (PEO) services to firms wishing to expand and establish a global workforce in Bangladesh. Traditional techniques of creating global employment and subsidiaries in Bangladesh take months and might be expensive.

Payrollbangadesh’s global employment solutions and PEO services are assisting hundreds of firms in Bangladesh in onboarding new workers in a matter of days while being fully compliant with local labor rules. To simplify the procedure, we employ a technologically advanced technique. 

1. Your organization handles employment and candidate selection in Bangladesh.
2. Payrollbangadesh recruits the selected individual through our local professional employment company in Bangladesh.
3. We ensure that your new employee is employed in accordance with local labor laws, payroll restrictions, benefits, and another requirements, all without the need to establish a subsidiary in Bangladesh.
4. The worker is legally contracted by Payrollbangadesh but assigned to work for your firm and reports to a management or team in your organization as your full-time employee.

Employment Solution Costs in Bangladesh

Here’s a brief table summarizing employment costs in Bangladesh:

Employee Income Taxes in Bangladesh

In Bangladesh, income tax for employees is calculated based on progressive tax rates, and the specific rate applied depends on the level of income and the individual’s tax residency status. Here’s a general breakdown:

For Resident Individuals:

1. Up to BDT 300,000: Nil
2. BDT 300,001 to BDT 700,000: 10%
3. BDT 700,001 to BDT 1,000,000: 15%
4. BDT 1,000,001 to BDT 1,500,000: 20%
5. BDT 1,500,001 to BDT 2,000,000: 25%
6. BDT 2,000,001 to BDT 3,000,000: 30%
7. Above BDT 3,000,000: 35%

For Non-Resident Individuals:

• A fixed rate of 30%

Minimum Tax for Individual:

• For individuals with a total income exceeding BDT 300,000 but tax payable is less than BDT 5,000, the minimum tax is BDT 5,000

For individuals aged 65 years and above, the minimum tax is BDT 4,000

Employee Social Contributions in Bangladesh

Employees are require to make certain social contributions. These typically revolve around contributions to Bangladesh, a form of social security that aims to financially support employees upon retirement.

1. Provident Fund: Typically, there is a mandatory percentage contribution from an employee with 7%-8% of his/her basic wage.
2. Insurance Contributions: These would be determined by the policy terms, still which are now at 0.46%, as well as the insurance firm.
3. Trade Union Contributions: These are usually only contributed by the employees and also would depend on the specific union’s rules.
4. Other Voluntary Contributions: These would be highly variable and depend on individual preference and as much as company policy.

Working Hours in Bangladesh

Weekly Working Hours:

In Bangladesh, standard work hours are 8 hours per day or 40 hours per week. Typically, the maximum amount of hours work in a week is 48. This can be exceed in exceptional circumstances such as permits, emergency work, an averaging plan, or a modify work schedule.

Laws Regarding Overtime: 

Overtime hours are any hours work over the usual working hours. Overtime pay in Bangladesh is often computed at a greater rate than the standard hourly salary. Also, overtime rules in Bangladesh are complicate and vary depending on the conditions and the employee. We are delight to discuss this in further depth in a specific scenario.

Holidays & Vacation in Bangladesh: 2023

1. Shaheed Day and International Mother Language Day, 21 February 2023, Tuesday
2. Shab-e-Barat, 08 March 2023, Wednesday
3. Birthday of the Father of the Nation Bangabandhu Sheikh Mujibur Rahman and National Children’s Day, 17 March 2023, Friday
4. Independence & National Day of Bangladesh, 26 March 2023, Sunday
5. Bangla New Year (Pohela Baishakh), 14 April 2023, Friday
6. Shab-e-Qadr, 19 April 2023, Wednesday
7. Jamat-ul-Wida, 21 April 2023, Friday
8. Eid-ul-Fitr, 21-23 April 2023, Friday-Sunday
9. May Day, 01 May 2023, Monday
10. Buddha Purnima, 05 May 2023, Friday
11. Eid-ul-Adha, 28-30 June 2023, Wednesday-Friday
12. *Ashura (Muharram), 29 July 2023, Saturday
13. National Mourning Day of Bangladesh, 15 August 2023, Tuesday
14. Janmasthami, 07 September 2023, Thursday
15. Eid-e-Miladunnabi (Sm), 28 September 2023, Thursday
16. Durga Puija/Dussehra, 24 October 2023, Tuesday
17. Diwali (Deepawali), 12 November 2023, Sunday
18. Great Victory Day of Bangladesh, 16 December 2023, Saturday
19. Christmas day, 25 December 2023, Monday

Sick Leave Entitlement in Bangladesh

As per the labor laws in Bangladesh, a worker is typically entitled to sick leave with full pay for up to 14 days per calendar year. This sick leave is generally granted if the employee can produce a medical certificate from a registered medical practitioner. Unused sick leave in a year usually doesn’t get carried over to the next year or get encashed at the end of the year, under standard labor law provisions.

Parental Leave in Bangladesh

The policy of Parental Leave in Bangladesh is primarily regulated under the Labour Act, of 2006. Here’s a general overview of Parental Leave policies:

Maternity Leave:

1. Female workers are entitled to maternity benefits, including 16 weeks of leave, 8 weeks before delivery, and 8 weeks after delivery, with full pay.
2. The female worker is entitle to receive such benefit at the rate of her last wage.
3. The worker is also entitle to a medical allowance.
4. Maternity leave is grant with full payment and is provide only to those female employees who have serve under the employer for a certain period before the notice of the pregnancy, as state by the law.

Annual Leave Entitlement in Bangladesh

In Bangladesh, the Annual Leave Policy is generally mandated by the Labor Act, and it stipulates the entitlements regarding annual or earned leaves for workers and employees. Below is a generalized overview of the annual leave policy:

Annual Leave Entitlement:

• Employees are generally entitled to earn annual leave with wages at the rate of one day for every eighteen days of work performed by an adult and one day for every fourteen days of work performed by a young person.
• The total annual leave accrued by a worker should not ordinarily exceed 20 days.

Severance Pay Entitlement in Bangladesh

The policy for Severance Pay Entitlement in Bangladesh is largely based on the Bangladesh Labour Act, 2006, and subsequent amendments. Here is an overview of the general principles governing severance pay in Bangladesh:

Severance Pay:

• An employee may be entitle to severance pay if he/she is retrench, or if his/her employment is terminate by the employer without any legal reason, or if the employer closes the business.
• As per the standard provisions, an employee is generally entitled to receive 30 days’ wages for every completed year of continuous service as well as severance pay.

Termination in Bangladesh

The employment law in Bangladesh mandates that employers must provide notice before proceeding with termination. The duration of the notice periods may vary based on the job type and as much as the industry involved. For example, permanent employees are required to serve a notice period ranging between 60 to 120 days, whereas temporary skilled workers have a notice period of 30 days.

Estimate Employment Costs Calculation In Bangladesh

To estimate employment costs in Bangladesh, several elements need to be consider. Here are a few components that typically make up the total employment cost, and you would need to calculate each based on specific numbers and percentages relevant to your situation:

1. Salary:

• Basic Salary
• Any additional allowances or bonuses

2. Employee Benefits:

• Health insurance
• Provident fund contributions
• Other benefits offered to employees

3. Taxes and Deductions:

• Employee Income Taxes
• Employee Social Contributions

Example:

Basic Salary: BDT 30,000

+ Allowances & Bonuses: BDT X

+ Benefits (e.g., Health Insurance): BDT Y

– Employee Income Tax: BDT Z

– Employee Social Contributions: BDT A

+/- Other Deductions/Additions: BDT B

—————————————-

= Total Employment Cost: BDT (30,000 + X + Y – Z – A + B)

How Can Employment Solutions Improve Small Businesses?

Employment solutions can significantly improve small businesses by streamlining human resource processes and ensuring compliance with local labor laws and regulations. They offer structured frameworks and services that can aid small businesses in recruitment.

Such as payroll management, benefits administration, and employee relations, mitigating the administrative burden and allowing business owners to focus on core operational activities. 

Furthermore, by ensuring adherence to employment laws and fostering positive employer-employee relationships, employment solutions can help minimize legal risks and enhance employee satisfaction and productivity.

Moreover, this is crucial for small businesses seeking to establish a strong organizational foundation, optimize workforce performance, and achieve sustainable growth. The tailored approach of employment solutions makes them an invaluable asset for small businesses navigating the complexities of the employment landscape.

Conclusion

Employment Solutions play a pivotal role in the modern business landscape by addressing various employment-related challenges. They streamline hiring, payroll, and compliance processes, particularly for startups and small businesses, allowing them to navigate the complexities of employment laws efficiently.

By ensuring legal compliance and mitigating employment-related risks, these solutions enable businesses to focus more on their core activities and strategic goals, fostering growth and sustainability. However, the adaptability and versatility of employment solutions make them a valuable asset for businesses across different industries.

FAQs

How do Employment Solutions handle legal compliance?

They stay abreast of local employment laws and regulations and ensure that the client’s business practices adhere to them, mitigating legal risks and potential liabilities.

Can Employment Solutions improve employee satisfaction and productivity?

Yes, by managing employee benefits, resolving employment-related issues, and also fostering a positive work environment, they contribute to higher employee satisfaction and productivity.

Are Employment Solutions suitable for every industry?

While they are versatile and adaptable, some industries may have specific requirements that necessitate specialized employment solutions.