Bangladesh labor law is founded on the Bangladesh Labour Act (BLA) enacted in 2006, which has undergone two revisions in 2013 and 2018. Export Processing Zones (EPZ) are governed by a separate BEZ Act administered by BEPZA, which grants operational flexibility including restrictions on union formation. Understanding Bangladesh's labor law is a core factor for Korean companies seeking to leverage low wages and abundant labor supply for successful market entry.
EPZ vs General Area Labor Law Comparison
Different labor regulations apply in Bangladesh's EPZ (Export Processing Zones) and general areas. Companies operating in EPZs must run a Workers Welfare Association (WWA) instead of a labor union, and some industrial actions are restricted. This is one of the main reasons many Korean companies prefer EPZs.
| Category | EPZ (BEPZA Jurisdiction) | General Area (BLA Applied) | Notes |
|---|---|---|---|
| Applicable Law | BEZ Act (BEPZA regulations) | Bangladesh Labour Act 2006 | EPZ separate jurisdiction |
| Labor Union | Prohibited (WWA operated) | Permitted (CBA possible) | WWA = welfare consultative body |
| Strike Rights | Effectively restricted | Legally permitted (after mediation) | EPZ production stability higher |
| Minimum Wage | Industry-specific Wage Board | Same application | Garments BDT 8,000/month |
| Working Hours | 48 hours/week | 48 hours/week | 200% for overtime |
| Dismissal Procedure | Simplified (BEPZA approval) | Strict cause + compensation required | EPZ flexibility higher |
| Dismissal Notice | 60 days (regular workers) | 120 days (regular workers) | EPZ period shorter |
| Safety Oversight | BEPZA self-inspection | Ministry of Labour inspectors | Periodic on-site inspection |
Minimum Wages by Industry and Wage Structure
Bangladesh minimum wages are set by industry-specific Wage Boards, with garments and textiles accounting for approximately 40% of total employment. The garment industry minimum wage was significantly raised from BDT 5,300 to BDT 8,000 in 2018, and the 2020 level is being maintained. IT and electronics sectors have no separate Wage Board, so the general minimum wage applies.
| Industry | Minimum Wage (Monthly) | Increase Year | Key Employers | Notes |
|---|---|---|---|---|
| Garments/RMG | BDT 8,000 (~$95) | 2018 | H&M, Zara suppliers | 83% of total exports |
| Textile/Spinning | BDT 7,650 (~$91) | 2018 | Domestic/foreign JVs | Separate Wage Board |
| Manufacturing (General) | BDT 7,650 (~$91) | 2018 | Multi-sector | Basic BLA applied |
| IT/Software | BDT 7,650 (~$91) | — | Domestic/foreign IT companies | No Wage Board established |
| Construction | BDT 7,650 (~$91) | 2018 | Korean/Chinese construction companies | Project-based employment |
| Leather/Footwear | BDT 8,300 (~$99) | 2019 | Adidas suppliers | Skill-level differential |
| Agriculture | BDT 5,600 (~$67) | 2015 | Farms/fisheries | Separate criteria applied |
Labor Environment Opportunities and Challenges
Bangladesh's labor market has the strength of low-cost labor supply, but labor risk management and compliance are simultaneously important. Since the 2013 Rana Plaza collapse, international buyers' ESG requirements have risen sharply, making labor environment improvement directly linked to export competitiveness.
4 Key HR Management Strategies for Korean Companies
From Recruitment to Exit: HR Management Flow
Bangladesh labor law maintains a balance between worker protection and business operational flexibility. By combining the four core strategies — EPZ utilization, grievance mechanism establishment, benefits strengthening, and local manager development — Korean companies can maximize the advantages of low-cost labor while effectively managing labor risks.
As of 2020, the average turnover rate of Korean companies in Bangladesh EPZs is reported to be approximately 15% lower than non-EPZ operations. Systematic HR management and benefits programs are delivering tangible effects on workforce retention, and maintaining a retainer with a local labor law specialist (Labour Lawyer) is also an essential compliance measure. KOTRA Dhaka Trade Office provides a service connecting companies with legal advisory firms when local labor disputes arise.