Pakistan
Capital: Islamabad
Currency: - PKR
Pakistan Labor Law and Employment Policy Overview
Employment Law Overview
- Key Legislation:
- Constitution of Pakistan
- Industrial Relations Act, 1968
- Social Security Act, 1969
- Minimum Wages Act, 1972
- Payment of Wages Act, 1973
- Legal Characteristics:
- Aims to protect the rights and welfare of employees
- Prescribes requirements for employment contracts, working hours, leave, social security, and termination benefits
Employment Contract Requirements
- Contract Types:
- Fixed-term contracts
- Indefinite-term contracts
- Contract Terms:
- Must include the names of the employer and employee, commencement date of employment, duration of employment (if fixed-term), job description, probation period (if applicable), assigned location, salary and payment details, working hours, holidays, sick leave, deductions from salary (fines, absences, damages, taxes), and any other applicable terms and conditions.
- Language and Currency:
- Contracts must be written in Urdu or English.
- Currency is Pakistani Rupee (PKR).
Working Hours Regulations
- Standard Working Hours:
- 9 hours per day, 48 hours per week, Monday to Saturday
- Rest Breaks and Intervals:
- 1 hour rest break per day
- No continuous work for more than 6 hours
- Employees working more than 8.5 hours per day are entitled to at least two rest breaks
- Female employees cannot be employed after 7 pm
Leave Policy
- Annual Leave:
- 14 days of paid annual leave per year after 1 year of continuous service
- Public Holidays:
- 11 statutory public holidays
- Special Leave:
- Sick leave: Up to 90 days per year
- Maternity leave:
- First confinement: 180 days
- Second confinement: 120 days
- Third confinement: 90 days
- Paternity leave: Up to 30 days per year
Employee Termination and Contract Termination
- Notice Period:
- 1 month's notice required by both employer and employee
- No notice required for temporary workers
- Severance Pay:
- Employees terminated without misconduct receive severance pay equivalent to 1 month's salary for each completed year of service or any part thereof exceeding 6 months
- Protection Against Unfair Dismissal:
- Employers cannot terminate contracts arbitrarily outside of the probation period and must have valid reasons for termination
Tax Laws
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Personal Income Tax:
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Salary Range (PKR) - Annual Gross Income Tax Rate 0-600,000 0% 600,000-1,200,000 5% 1,200,000-1,800,000 10% 1,800,000-2,500,000 15% 2,500,000-3,500,000 17.5% 3,500,000-5,000,000 20% 5,000,000-7,500,000 32.5% 7,500,000 and above 35%
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Social Security Contributions:
- Employee: 5%
- Employer: 5%
Health Insurance
- Insurance Policy:
- No mandatory health insurance policy
- Coverage:
- Private health insurance plans offer various healthcare services
Compensation and Benefits
- Minimum Wage:
- PKR 25,000 per month
- Salary Structure:
- Basic salary
- Allowances
- Bonuses
Work Permits and Visas
- Permit Requirement:
- Foreigners require a work permit to work in Pakistan
- Application Process:
- Application made by the employer to the Pakistan Immigration Department
Confidentiality and Non-Compete Clauses
- Enforceability:
- Confidentiality and non-compete clauses are enforceable in Pakistan
- Common Provisions:
- Confidentiality clauses prohibit employees from disclosing the employer's confidential information
- Non-compete clauses prohibit employees from working for competitors after leaving employment
Training and Development
- Legal Requirements:
- No mandatory training and development requirements
- Government Support:
- Government provides some training and development programs
Workplace Diversity and Inclusion
- Legal Requirements:
- Industrial Relations Act, 1968 prohibits discrimination based on religion, race, gender, or other protected characteristics
- Enforcement Measures:
- Government agencies responsible for enforcing anti-discrimination laws
Remote Work Policy
- Legal Framework:
- No clear legal framework supporting or restricting remote work
- Tax and Insurance Implications:
- Remote work may impact tax and social security obligations
Authoritative Website Addresses
- Ministry of Labour, Pakistan: https://www.labour.gov.pk/