Contractor Management in Bangladesh

Under the Bangladesh Labour Act 2006, a worker is defined by the nature of the work and the fact of payment for it, not by what the contract is called. Section 2(lxv) covers any person employed to do skilled, unskilled, manual, technical, trade promotional or clerical work for hire or reward — expressly including those engaged “either directly or through a contractor”. Engaging someone through an intermediary does not by itself place them outside that definition. Those employed mainly in a managerial or administrative capacity fall outside that definition, and several categories of worker are dealt with under separate chapters of the Act.

If an individual is subject to fixed working hours, mandated company policies, and direct daily managerial oversight, local labor tribunals may classify them as a de facto employee, at which point a compliant hiring process becomes the safer route, regardless of what the contract title says. True independent contractors autonomously set their hours and are judged purely on project deliverables.

Misclassifying talent isn’t just an administrative error; it creates immense financial and reputational exposure. If audited and challenged, foreign entities face profound qualitative risks:

• Back Benefits & Severance: Retroactive liability for unpaid statutory bonuses, provident fund contributions, and leave encashment.
• Legal Disputes: Protracted labor tribunal battles that drain resources and expose foreign parent companies.
• Reputational & PE Damage: Permanent Establishment (PE) triggers that can heavily complicate future operations or formal entity incorporation in South Asia.

The Act does not codify a control test. The control-and-independence analysis applied in practice comes from how labour tribunals read a working relationship, not from a section you can point to. That is precisely why contract wording alone is not a defence: the statute looks at what the person actually does and how they are paid.

Where a tribunal treats a contractor as a worker, statutory entitlements attach retroactively for the whole period of engagement. They are specific and countable: casual leave, sick leave, annual leave with wages, festival holidays, provident fund membership, termination compensation and end-of-service benefits calculated by length of service. The rates and the qualifying periods were revised by the 2025 and 2026 amendments to the Act, so the figure that applies depends on when the engagement ran and how long it lasted. Payroll that was never budgeted becomes payable in arrears, which is why every engagement we run follows how our EOR service works in Bangladesh, with the statutory paperwork retained from day one. Current employer-cost figures, including the full statutory burden, are broken down in our guide to employer costs in Bangladesh.

Share Your Contractor List

Send us the people you want to engage, with their scope and their rates. We review each one against the control-and-independence tests a Bangladeshi tribunal would apply, and say plainly if someone looks like an employee rather than a contractor.

We Contract & Onboard

We issue a localized agreement and statement of work in our name, with IP assignment and confidentiality written in at signature. Identity, address and bank verification are completed before the first engagement date, and you receive the executed pack.

Approve Invoices

Contractors submit against agreed milestones or timesheets. You review and approve in one place, and we consolidate every contractor onto a single monthly invoice in your currency, with no per-contractor reconciliation and no exchange-rate markup.

We Pay & Keep Records

We disburse in BDT to local bank accounts or mobile wallets, deduct tax at source and remit it, then retain the contracts, receipts and statutory filings for the period you would need them in an audit.