Hiring in GMC means working under a statute that sets floor terms for every contract, fixes the timing of every salary payment and puts a tax officer between you and any payment on termination. Templates brought in from another country tend to fail on the details. Basnet Law Pte. Ltd. is the first incorporated law firm in GMC. We advise employers on hiring, paying and terminating staff under the Employment Act 2025 and the Employment of Foreign Workforce Act 2025, both deemed in operation from 26 December 2024. If you are about to employ people in Gelephu, this page sets out what the law requires and how we set you up to comply with it.
How we help
- Drafting contracts of service that avoid illegal terms, since any term less favourable than the Act is "illegal and void to the extent that it is so less favourable".
- Notice periods and termination, and dismissal for misconduct after due inquiry.
- Salary compliance: payment within 7 days of the salary period, payment on dismissal and the limits on deductions.
- Hours, rest days and overtime.
- Business transfers, where a transfer of an undertaking does not terminate contracts of service.
- Retrenchment and retirement benefit thresholds and the income tax clearance step on termination.
- Work pass compliance for foreign staff under the Employment of Foreign Workforce Act 2025.
- Payroll withholding for Bhutanese citizens resident in GMC under the Income Tax Act 2025.
How GMC employment law works, in plain terms
The Employment Act 2025 sets floor terms. Either party may give notice to terminate, and the notice must be the same for both sides. Where the contract is silent, the statutory minimum runs from one day for service under 26 weeks to 4 weeks for service of 5 years or more. Either party may terminate without notice by paying salary in lieu. An employer may, after due inquiry, dismiss without notice for misconduct, or instead downgrade or suspend the employee.
On pay, salary must be paid before the expiry of the 7th day after the salary period, and sums due on dismissal within 3 days. No deduction may be made unless the Act authorises it or a court or competent authority requires it. Every employee is entitled to a weekly rest day and must not be required to work more than 8 hours a day or 44 hours a week, subject to the exceptions the Act allows. All "$" amounts are US dollars. The Act provides for a national minimum wage, but the figure is set outside the Act.
Two provisions surprise international employers. No payment on termination may be made without the permission of the tax officer, and the employer must notify the termination immediately. And where a principal contracts for labour, the principal, the contractor and the subcontractor are jointly and severally liable for the workmen's salary.
Foreign staff need a valid work pass under the Employment of Foreign Workforce Act 2025, and the employer must keep a register of foreign employees. If the Controller revokes a pass, the employer must terminate within 7 days.
Who this is for
- International companies hiring their first GMC employees.
- HR directors building handbooks, policies and templates for a GMC workforce.
- Licensed Firms whose Approved Persons need compliant service agreements.
- Employers managing restructurings, transfers of business or dismissals.
How an engagement runs
- Audit. We review your existing templates against the Act's contract, notice and dismissal rules and its salary provisions, and tell you what has to change.
- Contract pack. Offer letter, contract of service and policies aligned with the Act, ready to issue.
- Foreign workforce set-up. Work pass applications, the register of foreign employees and levy controls.
- Payroll design. Salary periods, payment timing and the Income Tax Act deductions for Bhutanese citizens resident in GMC where they apply.
- Exit management. Notice, the tax officer's clearance and any retrenchment benefit position, through to the final payment.
Frequently asked questions
What notice must I give to terminate an employee in GMC?
Whatever the contract says, provided it is the same for both parties. If the contract is silent, the statutory minimums apply: one day, one week, 2 weeks or 4 weeks depending on length of service. We fix the period in the contract so there is no argument later.
Can I dismiss for misconduct without notice?
Yes, "after due inquiry", on grounds of misconduct inconsistent with the conditions of service. The Act also allows downgrading or suspension without pay as alternatives. We run the inquiry step with you so the dismissal holds.
Is retrenchment benefit mandatory?
The Act does not fix an amount. It provides that an employee with less than 2 years' continuous service is not entitled to retrenchment benefit, and less than 5 years for retirement benefit. We check the position for each affected employee before any restructuring is announced.
What happens to staff when I buy a business?
A transfer of an undertaking does not terminate contracts of service; they continue as if made with the transferee. We deal with the employment side in the acquisition documents.
Talk to GMC counsel on the ground
Basnet Law Pte. Ltd. is the first law firm incorporated in the Gelephu Mindfulness City. A short conversation early in a matter usually saves time and cost later. Write to basnet@basnetgmc.com or office@basnetgmc.com with a few lines about your plans, and we will tell you plainly what is needed, how long it takes, and whether we are the right fit.
You may contact Basnet Law at basnet@basnetgmc.com or office@basnetgmc.com for any legal queries related to GMC.
