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An Overview Of The Various Labor Laws In Pakistan

There are so many labour laws in existence in Pakistan it would be remiss of us to try and put them all into one article. This is merely an overview touching on the main laws that can have a major impact on the legality of your business and how you run it in terms of your employees. We have a team here at Josh and Mak International who specialize in labor laws so please contact in the first instance if you are unsure about any of them and are worried about breaking the law.

The main laws you need to concentrate on when you are an employer are;

  • Paid vacation and annual leave
  • Pay on public holidays
  • Compulsory weekly rest days
  • Overtime compensation
  • Night shift compensation
  • Compulsory holidays
  • Employment security
  • Fair treatment
  • Equal pay
  • Non-discrimination in the workplace
  • Equal treatment of women at work
  • Health and Safety
  • Employer Care
  • Free Protection
  • Training
  • Labor Inspection System
  • Regulations on Health and Safety
  • Home-based Work
  • Fixed term contracts
  • Probation Period
  • Maternity rights including leave and payment
  • Family responsibilities
  • Paternity leave
  • Parental leave
  • Flexible work option for parents / work-life balance
  • Regulations on family responsibilities
  • Sick leave and sick pay
  • Medical care
  • Social Security
  • Pension Rights

These are all covered under the Factories Act, 1934, the Payment of Wages Act, 1936, Workmen’s Compensation Act, 1923, Mines Act, 1923, Dock Labourers Act, 1934, The West Pakistan Shops and Establishments Ordinance, 1969, The Road Transport Workers Ordinance, 1961, Shops and Establishments Ordinance, 1969, Merchant Shipping Ordinance, 2001 and the Workmen’s Compensation Act, 1923.

If you aren’t up to speed on the labor laws of Pakistan they can be a veritable minefield. This is where Josh and Mak come into their own to help you will all aspects of these laws.You don’t want to be illegally employing people any more than you want to be legally employed. Contact us today for confidential and impartial advise on any of the numerous labor laws that currently exist in Pakistan.

Law in Pakistan

Forced and bonded labor

Forced labor is any type of work or service in which someone engages involuntarily and under a threat or coercion. Bonded labor is a specific kind forced labor existing mainly in Asian and other agricultural societies. This type of labor mainly crops up in cases where monetary/financial deals occur such as loans, which, if the debtor is unable to pay, he has to serve the creditor for some specified or unspecified term.

How do we know whether bonded/forced labor is taking place or not?

Here are the indicators to determine whether work is forced/bonded labor or not.

  • Whether wages are equal to minimum wage or wages that are normally paid to that class of workers. If anyone is being paid lower wages (or wages lower than the amount negotiated or finalized earlier), he is in the conditions of bonded labor. Moreover, if an employer makes undue deductions from wages, he is also creating bonded labor conditions.

  • Whether wages are directly paid to the worker or some other person is taking his/her wages

  • Whether daily working hours are in accordance with the provisions of the law, 8 hours per day, 48 hours per week, and whether he has the right to choose to work overtime work. If the employer is requiring him/her to work overtime more than the law states they are treating this worker as a bonded laborer.

  • Whether this person can leave his/her work (after giving notice) and move to some other place to start a new job.

  • Whether this person can sell his/his family’s produce in the market

  • Whether this person is working under “peshgi” or “bonded loan” as “peshgi” itself has no problem unless it creates bondage. Workers usually take advances from their employers but not all advances lead to bonded labor

  • Whether the worker keeps his identity documents with himself or his employer keeps these in his own custody. These can include passports, ID cards, educational degrees, domiciles etc.

If you are working under the bonded labor scheme, or know of an employer who is exploiting his worker in this manner please contact us for confidential advice. This is a form of slavery that is strictly forbidden in Pakistan under the Bonded Labor System (Abolition) Act, 1992 and the Bonded Labor System (Abolition) Rules, 1995.

Domestic Work

Domestic work is one of the oldest occupations for women across the globe. The ILO Convention (C189) defines domestic work as “work performed in or for a household or households”. In the new convention adopted by the ILO in June 2011 (C189) domestic work is different from care work that is performed by household members as part of their responsibilities to their families and without the creation of a relationship of employment. The various duties which fall under the banner of domestic work include;

  1. Cleaning

  2. Washing dishes or clothes

  3. Ironing

  4. Cooking

  5. Security guards

  6. Gardening

  7. Driving

  8. Child Care/Babysitting

  9. Elder Care

  10. Taking care of ill persons or persons with disabilities

  11. Taking care of animals/pets etc.

  12. Assistance in other household daily chores

There are hard and fast rules regarding the hiring of domestic employees which include all of the aforementioned labor laws. Many domestic workers aren’t aware of their rights and we at Josh and Mak are waiting for your call regarding domestic workers whether you are an employer or an employee.We are superheroes in the area of labor laws, let us help you.

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Child labor in Pakistan

Both the labor laws and the constitution prohibit the employment of children under the age of 14. However, UNICEF and ILO and UNICEF differentiate between child labour and child working. According to both organizations, all work done by children cannot be classified as child labor. There is a definite need to differentiate between them. If work is not affecting the health, personal development and education of a child this work can’t be classed as negative doesn’t therefore fall into the category of child labor. This includes helping out in the family business or working after school or during the school holidays or after school hours. Child work is looked on positively as helping children to develop and gives them the chance to learn the skills that will be necessary for them to become productive and useful members of society.

On the other hand, according to ILO, Child Labor is work that could deprive children of their childhood, strip them of their dignity and be harmful to their mental, moral and physical development as well as interfering with their education. The following laws deal with all child working and if you are unsure of any aspect of either of these contact us today.

The Employment of Children Act 1991

The Employment of Children Rules 1995
Mines Act, 1923
The Children (Pledging of Labor) Act, 1933
The Factories Act, 1934

The Employment Of Children Act 1991 defines a “child” as any person younger than 14 and those aged between 14-18 are adolescents. As mentioned above, the Constitution of Pakistan also regards the minimum age as 14 years. However, the 18th amendment has actually raised the minimum age up to 16 without amending the labor laws, so there is still contradiction. Article 25(A) of the Constitution says that the state now has to provide compulsory education to all children between the ages of five and sixteen years, which means that, a child can’t be actually be allowed to work before 16 years of age.

Home based workers

As the name implies, these are workers who carry out activities they are paid for from within their own home and not at a place of work. This is one of the oldest professions in Asia and the inception of the Internet has opened the doors for many more to join the home workforce. It particularly benefits women who can earn an income without having to worry about childcare. They either work for themselves on a self employed basis or carry out for an employer. There are different laws relating to each situation and we can advise you on both aspects to ensure both fair treatment and remuneration. The following aspects should also be considered when working for an employer;

  • Statutory social security protection

  • Occupational safety and health

  • Access to training

  • Minimum age and maternity protection

There are various forms of home-based activities including the following:

Traditional Manual Activities

Modern Capital Intensive Activities


& Assembly



Prawn shelling

Routine assembly




Data Processing



Artisan Production

Carpet weaving

Foot/volley ball making

Shoe making

Soap making

Straw basket making

Incense stick (agarbatti) making

Sack (bori) stitching


Professional Work

Medical consulting

Architectural consulting

Tax consulting

Legal advising

Web-content writing

Computer programming

Personal Services







The following table has been adapted to show how the ILO differentiates among the 3 main types of home workers.



Home workers


Type of contract


Job specific contract

Employment contract


After the sale of goods and services

On production of goods (piece rate)

On production of goods/services (piece or time rate)

Contracting with




Means of Production (provided by)


Self or employer



(provided by)






Indirect or no supervision

Direct supervision

Economic Independence




Are you getting the minimum wage and overtime rates as defined by the government?

Please call us today if your workplace is violating the rules regarding minimum wages. You can help us to help others as your information will be passed on to the Workers Employers Bilateral Council of Pakistan (WEBCOP) and Wage Indicator Pakistan will sort out the matter between you as a worker, your trade union and your employer.

Penalties Under The Minimum Wage Act

The table below illustrates the punishments that will be handed out to those who break the rules regarding the payment of the minimum designated wage to their employees;


Applicability (Area)




Fines (monetary)


Minimum Wages Ordinance, 1961 (section 9)

Islamabad Capital Territory, Sindh, Balochistan

Up to Rs.500 or

Up to 6 months or both

Minimum Wages Ordinance, 1961 (adapted in 2012)


(section 9)


Up to Rs.20,000 or



Up to Rs.50,000 or           (on subsequent contravention)

Up to 6 months or both



Up to 6 months or both



Khyber Pakhtunkhwa Minimum Wages Act, 2013

(section 9)

Khyber Pakhtunkhwa

Up to Rs.20,000 but not less than Rs.5,000 or


Up to 6 months or both


As well as these fines, the guilty employer will have to pay the difference between what they worker has been getting paid and what they should have been getting. The table below illustrates other penalties employers can face under the Payment of Wages Act;


Applicability (Area)






Fines (monetary)


Payment of Wages Act, 1936

(section 20)


Islamabad Capital Territory, Sindh, Balochistan

Section 5: Time of Payment of Wages

Section 7: Deductions which may be made from wages

Section 8: Fines

Section 9: Deductions for absence from duty

Section 10: Deductions for damage or loss

Section 11: Deductions for services rendered

Section 12: Deductions for recovery of advances

Section 13: Deductions for payments to cooperative societies and insurance schemes

Up to Rs.500


Payment of Wages Act, 1936

(adapted in 2014)

(section 20)


Up to Rs.10,000


The Khyber Pakhtunkhwa Payment of Wages Act, 2013


(section 20)


Khyber Pakhtunkhwa

Up to Rs.10,000 or




Up to Rs.20,000 or   (on subsequent contravention)

Up to one month or both



Up to two months or both


Payment of Wages Act, 1936

(section 20)



Islamabad Capital Territory, Sindh, Balochistan

Section 4: fixation of wage periods

Section 6: wages to be paid in current coin or currency notes

Section 25(section 24 for Khyber Pakhtunkhwa Act): Display by notice of the abstracts of this act

Up to Rs.200


Payment of Wages Act, 1936

(adapted in 2014)

(section 20)


Up to Rs.5,000




The Khyber Pakhtunkhwa Payment of Wages Act, 2013

(section 20)



Khyber Pakhtunkhwa

Up to Rs.10,000 or


Up to Rs.20,000 or (on subsequent contravention)

Up to one month or both


Up to two months or both

This is only the tip of the iceberg when it comes to the complex labor laws in Pakistan. The expert team at Josh and Mak International are here to guide you in the right direction, whether you are an employer or an employee. Call us today for the best confidential advice available from any law firm in the country.


The Josh and Mak Team
If you are reading this, chances are we will become your favourite virtual law firm at some point. In an economy where businesses have lost their strategic edge and are forced to reconsider their traditional concepts of consulting bricks and mortar law firms, which bill by the minute, we can provide you with affordable quality legal advice, delivered anywhere in the world. Since 2010, our firm has already pioneered and adopted the concept of honest and practical legal advice, delivered straight to your email inbox. In the post Covid19 era, working with the Josh and Mak Team means that, you will get the same commitment, discipline and work ethic, without the heavy Bricks and Mortar and the financial baggage which comes with the latter. Let your choice to work with Josh and Mak International become your unfair strategic advantage over your business competitors of the past, present and the future!