Wages, Working Hours, Overtime, Leave and the Festival Bonus: The Employer's Rulebook under Chapters IX to XI of the Labour Act

In this guide: Hours, rest, weekly holiday and night work (Chapter IX) · Overtime under s.108 and the 208-hour formula · Leave and holidays (ss.115–118) and the festival bonus (Rule 111) · Wages: definition, pay day, deductions and claims (Chapter X) · Minimum wages (Chapter XI) and the sector gazettes · Payroll errors that become Labour Court claims

The short answer

Build the payroll from five numbers. The hours: eight a day, forty-eight a week, with the displayed notice under s.111(8) matching the roster, rest breaks, and no one above sixty hours in any week. The overtime rate: basic plus dearness allowance divided by 208, doubled, applied to every hour beyond eight in a day or forty-eight in a week, paid with the month’s wages (overtime on house rent or medical allowance is not required; overtime on basic alone, ignoring DA, is short). The leave balances: ten casual, fourteen sick, annual leave accruing at one per eighteen days worked from the second year, thirteen festival days on the published list, with a leave register per worker and encashment of annual leave on separation. The pay day: within seven working days of the end of the wage period, by bank where possible, with a pay slip showing basic, each allowance, overtime hours and rate, and each deduction against its s.125 head. The floor: the sector minimum wage gazette for each grade, applied to basic and to the total as the gazette prescribes, with the annual increment the gazette fixes. The calculator does the overtime, the bonus and the annual leave; the sections below take each chapter, and the employer’s guide to the Act shows where the 2025–26 amendments touched them.

Hours, rest, weekly holiday and night work (Chapter IX)

Two practical points. The 56-hour yearly average means that a factory running sixty-hour weeks in season must run under forty-eight out of season, and the inspector checks the year, not the week. And the displayed notice is the standard against which overtime is computed: hours worked outside the notice without being recorded are the usual finding in a wage claim.

Overtime under s.108 and the 208-hour formula

Section 108 provides that where a worker works more than the hours fixed by the Act in a day or a week, he is entitled to an allowance for the overtime at twice the ordinary rate of his basic wage and dearness allowance and ad hoc or interim wage, if any. The Rules (Rule 102 in the 2015 text) fix the hourly ordinary rate by dividing the monthly basic (with DA and ad hoc) by 208, that is 26 working days of 8 hours; the overtime rate is twice that. Worked example: basic Tk 8,000 and no DA gives an hourly rate of Tk 38.46 and an overtime rate of Tk 76.92; thirty hours’ overtime in the month earns Tk 2,307.69. For piece-rated workers the ordinary rate is the time rate the Rules fix for the work or the average earnings. Three errors recur. Computing on basic alone where a dearness or ad hoc allowance is paid (the Act names both). Treating the compensatory holiday or the Friday as overtime at single rate: work on a weekly or festival holiday without a compensatory holiday is paid at the overtime rate for the hours worked and the holiday is still owed. And exceeding the ceiling: s.108 does not authorise hours beyond s.102, so overtime above sixty hours in a week is itself an offence however well paid, and the garment buyers’ codes apply the same sixty-hour test. Overtime must be recorded in a register (the Rules prescribe the form), shown on the pay slip with hours and rate, and paid with the wages of the period; “fixed overtime allowances” and “production bonuses in lieu of overtime” do not satisfy s.108 unless they equal or exceed the computed figure every month.

Leave and holidays (ss.115–118) and the festival bonus (Rule 111)

Leave is counted in working days unless the Rules say otherwise, intervening weekly and festival holidays do not consume annual leave, and wages for the leave period are paid before the leave starts where it is four days or more (s.119, as last read). The leave register and the festival-holiday notice are the two documents inspectors ask for first.

Wages: definition, pay day, deductions and claims (Chapter X)

Definition (s.120, s.2(45)). Wages means all remuneration expressed in money payable under the terms of employment, including overtime, holiday and leave pay and any sum payable on termination, and excludes the value of accommodation and utilities, the employer’s provident fund contribution, travelling allowance and any sum paid to defray special expenses, and gratuity. Basic, house rent, medical, conveyance and food allowances are all wages. Responsibility and period (ss.121–122). The employer is responsible for payment; the wage period may not exceed one month. Pay day (s.123). Wages are paid before the expiry of the seventh working day after the end of the wage period; on separation, all dues within 30 working days (s.123(2), and s.30 for the final settlement). Mode (s.124). In current coin or notes or by bank transfer, mobile or electronic payment as the amendments permit; the garment sector pays by bank or mobile under the 2020–21 reforms. Deductions (ss.125–131). Only: fines under s.126 (for acts specified in a notice approved by the Chief Inspector, not above one-tenth of the month’s wages, recorded in a register and spent for the workers’ benefit); absence from duty (s.127, proportionate); damage to or loss of goods or money entrusted to the worker caused by neglect or default (s.128, after a hearing, not above the loss); house accommodation (s.129) and amenities (s.130) supplied by the employer; recovery of advances (s.131, in instalments, no interest beyond the Rules); income tax; court orders; provident fund and approved fund contributions; cooperative society dues; and check-off of union subscriptions (s.204). Nothing else: not uniforms, not tools, not training, not “penalties” for late attendance outside s.126. Claims (ss.132–137). A worker, or the Inspector on his behalf, claims unpaid or deducted wages in the Labour Court within twelve months; the court may award the sum with compensation up to a stated multiple, and a single application may be made for a group. Records. A wage register, a pay slip for each worker showing components, overtime and deductions, a fines register and an advances register; the 2022 Rules require the pay slip in Bangla.

Minimum wages (Chapter XI) and the sector gazettes

Sections 138 and 139 constitute the Minimum Wages Board and provide for its recommendations by sector and grade, now to be reviewed every three years rather than five (s.139(6) as amended). Section 148 makes the gazetted rate binding and s.149 forbids paying less; the penalty in s.289, previously up to a year or Tk 5,000, is reported at Tk 50,000 to Tk 1 lakh or up to a year after the 2026 Act, with power to direct the fine to the worker. The gazette fixes basic and allowances separately, so an employer who pays the total but a lower basic is in breach, and overtime, gratuity and the festival bonus are computed on the gazetted basic. Where no sector gazette applies, the Act sets no general minimum; the agreed wage is the floor, subject to the 2022 Rules’ parity requirement for contract workers.

Payroll errors that become Labour Court claims

In the wage claims we see, the same ten errors account for most of the money. Overtime on basic alone where a dearness or ad hoc allowance exists. Overtime at single rate, or a flat “OT allowance” below the computed figure. Hours beyond the displayed notice not recorded and not paid. Annual leave not credited after the first year, or credited but not encashed on separation. Festival holidays given as eleven after the amendment, or a festival holiday worked without the two compensatory days. Festival bonus withheld from workers with more than a year’s service, or computed on half basic. Wages paid after the seventh working day, with no pay slip. Deductions for uniforms, tools, breakages or late attendance outside s.126. Final dues paid late or without the leave encashment. And a gazetted minimum paid as a total while the gazetted basic is undercut. Each is recoverable for twelve months with compensation, each is a DIFE finding, and the first three are the ones the garment buyers’ audits fail a factory on. The fix is a payroll that computes from the Act’s own formulas, a pay slip in Bangla that shows the arithmetic, and a leave register that the worker signs. Our termination guide covers the separation sum; our maternity guide the one leave this guide leaves out.