Non-compliance with the Bangladesh Labour Act 2006 (and its amendments in 2013, 2015, and 2018) exposes employers to penalties ranging from fines of BDT 5,000 to BDT 1,00,000, imprisonment up to one year, or both — depending on the nature and severity of the violation. Beyond legal penalties, non-compliance creates employee grievances, labor disputes, and reputational damage that can cost far more than any fine. For companies using HR software, the question is whether the system enforces compliance by design or merely stores data that the HR team must manually check against legal requirements.

This guide covers the key compliance areas under Bangladeshi labor law that every HRM system must address.

Wage and Salary Compliance

Payment Timeline

Section 123 of the Bangladesh Labour Act stipulates that wages must be paid within 7 working days after the last day of the wage period for establishments with fewer than 1,000 workers, and within 10 working days for larger establishments. HR software must track these deadlines and alert payroll administrators when the payment window is approaching. Ultimate HRM includes configurable payroll deadline reminders tied to establishment size and wage period settings.

Minimum Wage

The Minimum Wages Board sets sector-specific minimum wages. As of 2024, the garment sector minimum wage was set at BDT 12,500 per month, while other sectors have different thresholds. HR software must validate salary structures against current minimum wage levels and prevent the creation of salary records that violate applicable minimums. Systems should also flag existing employees whose wages fall below a newly revised minimum when government updates take effect.

Wage Deductions

Section 125 limits the types and amounts of deductions permissible from employee wages. Lawful deductions include absence from duty, damage or loss of goods (with conditions), provident fund contributions, advances paid, income tax, and cooperative society contributions. Total deductions (excluding tax) cannot exceed 50% of wages. HR software must enforce these limits and prevent non-permissible deductions from being applied.

Working Hours and Overtime

Standard Working Hours

The Act prescribes a maximum of 8 hours of work per day and 48 hours per week for adult workers. For adolescent workers (ages 14-18), the limit is 5 hours per day and 30 hours per week. Attendance tracking systems must flag when employees are scheduled or clocked for hours exceeding these limits.

Overtime Regulations

Overtime is permitted up to a maximum of 2 hours per day, bringing the daily maximum to 10 hours and the weekly maximum to 60 hours. Section 108 requires that overtime be compensated at twice the basic wage rate. This is not optional — it is a legal requirement. HR software must automatically calculate overtime at 2x the basic rate and maintain records of all overtime hours worked, as these records are frequently inspected during labor audits.

Rest Days and Intervals

Workers are entitled to one day of rest per week (Section 103) and at least one hour of rest interval during a work shift exceeding 6 hours. Shift scheduling modules in HRM software must enforce these requirements and prevent the creation of schedules that violate rest period rules.

Leave Entitlements

Annual Leave

Section 117 grants one day of annual leave for every 18 days worked in the preceding 12 months. For newspaper workers, the ratio is one day per 11 days worked, and for tea plantation workers, one day per 22 days worked. HR software must calculate leave accruals based on the applicable formula for the establishment type and track balances accurately.

Casual Leave

Workers are entitled to 10 days of casual leave with full wages per calendar year. Unused casual leave does not carry over to the next year. The system must track and enforce both the entitlement and the non-carry-over rule.

Sick Leave

Fourteen days of sick leave with full wages per calendar year, subject to production of a medical certificate for absences exceeding 3 consecutive days. Unused sick leave does not accumulate. HR software should require medical certificate documentation for qualifying absences and enforce the 14-day annual limit.

Maternity Leave

Section 46 provides 16 weeks of maternity leave — 8 weeks before and 8 weeks after delivery — with full average wages for women who have worked at least 6 months. HR software must track eligibility based on service length, manage the leave period, and ensure correct wage calculation during maternity leave.

Termination and Separation

Notice Periods

For permanent workers, the employer must provide 120 days' notice for termination or pay in lieu of notice. For temporary workers, 30 days' notice or pay in lieu is required. The worker must provide 60 days' notice for resignation (permanent) or 14 days (temporary). HR software must enforce these notice period calculations and compute the correct pay in lieu when applicable.

Gratuity and Severance

Workers who complete at least one year of continuous service are entitled to gratuity upon termination — 30 days' wages for each completed year of service in cases of retrenchment, and 14 days' wages for each year in cases of voluntary separation (if not covered by a provident fund). HRM systems must calculate gratuity and severance automatically based on the separation type and length of service.

Record-Keeping Requirements

The Labour Act and accompanying rules require employers to maintain specific records:

  • Register of workers (Section 9): Name, father's name, date of birth, address, date of employment, nature of work
  • Attendance register: Daily work hours with clock-in and clock-out times
  • Leave register: Leave applications, approvals, and balance calculations
  • Wage register: Monthly records of gross pay, deductions, and net pay per employee
  • Overtime register: Overtime hours and compensation paid

All records must be retained for a minimum of 2 years following the last entry. Ultimate HRM generates and stores these registers digitally, with the ability to produce printed copies in the format expected by labor inspectors.

How Ultimate HRM Ensures Compliance

Unlike generic HRM solutions built for Western labor markets, Ultimate HRM by Nexis Limited was designed with Bangladesh Labour Act compliance as a core requirement, not an afterthought. The system enforces overtime rate calculations, validates deduction limits, tracks leave accruals using the correct statutory formulas, and generates inspection-ready registers. Automated alerts notify HR administrators when compliance deadlines approach or when system data indicates a potential violation.

For organizations operating in regulated industries or with large workforces, compliance is not optional — it is an operational requirement. Contact Nexis Limited to discuss how Ultimate HRM can be configured for your specific compliance needs, or visit our portfolio to see our track record.