Labor Laws in Bhutan

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Bhutan’s issues of labor and employment are handled by the Labor and Employment Act of Bhutan, 2007. Here we explain the employment laws in Bhutan that play an important role in the Bhutanese labor market.

Foreigners in Bhutan

To work in Bhutan, foreigners must get a work permit, without which they cannot start any job. In Bhutan, a work permit is only valid for the type of work that is clearly stated in the permit. This means that it cannot be used for another job.

Professionals who are highly trained, as well as technical workers, are given permission to work in Bhutan for a period of three years. Other skilled workers can only stay in Bhutan for a period of one year, after which they must get their work permit reviewed and extended.

Minimum Wage

In Bhutan, the minimum wage is BTN 125 for each day of work. This amounts to USD 2 and must be paid to each worker.

Moreover, once an employer has more than five employees, they must establish proper work rules in order to have consistency and ensure that everyone gets paid on time.

Paid Annual Leave

Those employees who stay with the same employer and continue working for a period of six months are awarded paid annual leave—these amount to a period of 1.5 days every month, or 18 working days every year.

Even though employees who have been with the same company for six months are awarded these annual leave days, they can only utilize them twelve months after they have been with their employer.

Sick Leave

Those employees who have been working for six months are entitled to utilizing paid sick leave. Full-time employees are given a minimum of five days per year as sick leave.

These can be used once the employee has completed six months at the same company.

Other Leave

Those employees who have been a part of the company for six constant months are allowed to take advantage of paid casual leave in case of a family emergency or self-care day. These holidays can also be utilized if the employee is getting married, there is a marriage in their family, family births and deaths,  to care of family members in case of sickness, and any other reason that has been discussed with the employer.

Full-time employees are given five casual leave days per year as long as they have successfully completed six months of service in the company.

Pension and Security Contribution

Each employee has a probation period as per their contract. Once this period has been successfully completed, employees can become part of a providend fund scheme. This scheme ensures that contributions are taken from the employee, as well as the employer, starting from the first day after the probation period, going into the employee’s saving account.

Both parties must willingly contribute 5 percent of the monthly salary that the employee is receiving. This will then get added to the worker’s providend fund account.

Learn more about labor laws in Bhutan here.

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