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Employees working in shops and commercial establishments are entitled to 14 days of fully paid annual leave after a continuous employment of 12 months with the same employer. Employees can request payment in lieu of annual leave. Unused annual leave days can be accumulated to next year, provided the total number of accumulated leaves does not exceed 30 days in a year.

In the provinces of Punjab, Sindh, and Khyber Pakhtunkhwa, employees working in factories are entitled to annual leave of 14 consecutive days at full pay after a continuous service of 12 months. Employees must be paid half of their payment for leave in advance. If an employee fails to avail annual leave in a year, it shall be added to the next year. If an employee’s contract is terminated before availing of their annual leave, they will be entitled to full payment for the unused leave days. In Balochistan province, factory employees are entitled to fully paid 20 days’ annual leave after a continuous service of 12 months. They can accumulate leave for up to a total of 60 days.

Employees in commercial establishments are entitled to sick leave with full wages for a total period of 8 days in a year. Such leave, if not availed of by an employee during a calendar year, can be carried forward, but the total accumulation of such leave shall not exceed 16 days at a time.

Factory workers in the provinces of Punjab and Khyber Pakhtunkhwa are entitled to 16 days of sick leave in a year at half pay. The province of Balochistan grants 20 days’ sick leave with full pay if the worker provides a medical certificate. The province of Sindh provides 16 days’ sick leave with full pay.

Female employees are entitled to maternity leave of 12 weeks – 6 weeks before and 6 weeks after delivery in the provinces of Punjab and Khyber Pakhtunkhwa. In Sindh province, the leave duration is 16 weeks, split into – 4 weeks before and 12 weeks after delivery. In Balochistan, the leave is for 14 weeks, split into – 6 weeks before and 8 weeks after delivery. They must submit a medical certificate to their employer and must also give written notice in advance to their employer of availing this leave. Employees are eligible for maternity leave and benefits if they have worked for at least 4 months with the same employer in Punjab, Khyber Pakhtunkhwa, and Balochistan and 1 year in Sindh.

Under the Maternity and Paternity Act, 2023, the federal government has introduced maternity leave of 180 days on the first birth, 120 days on the second birth, and 90 days on the third birth for female employees of public and private establishments under the administrative control of the federal government. This leave can only be availed 3 times in the entire service period of the employee. Employees are entitled to full pay during leave.

A pregnant or nursing woman shall not be obliged to perform night work if a medical certificate declares such work to be incompatible with her pregnancy or nursing. It is unlawful to dismiss an employee for the reason of their pregnancy or childbirth.

Employees in Pakistan’s Punjab province are entitled to fully paid paternity leave of 7 days, limited to the birth of their 2 children. Employees must apply for paternity leave 7 days in advance of the expected date of delivery of a child. There are no paternity leave benefits in other provinces.

Under the Maternity and Paternity Act of 2023, the federal government has introduced paternity leave of 30 days on full pay for employees of public and private establishments under the administrative control of the federal government. This leave can only be availed 3 times in the entire service period of the employee.

Pension

All employees must be insured with the Employees' Old‑Age Benefits Institution (EOBI). Employers must maintain records of employee registration and contribution payments. Employees become eligible for an old-age pension when they reach the age of 60 years, or 55 years in the case of female employees, and they have paid contributions for at least 15 years. The retirement age for employees working in mining for at least 10 years before retiring is reduced by 5 years. Employees can also take early retirement with reduced pension benefits 5 years prior to reaching retirement age if they have paid contributions for at least 15 years. Early retirement is not available to employees in Sindh.

The amount of pension is 2% of the average monthly wages per year of insurable employment. A period of 6 months or more on insurable employment shall be treated as 1 full year. In the case of early retirement, the pension is reduced by 0.5% for each month it is claimed before the normal retirement age.

Employees who have not paid contributions for 15 years but have paid for at least 2 years are entitled to a lump sum retirement grant when they reach retirement age. The amount of the retirement grant is calculated as 1 month’s average salary for each year of contributions made.

If the insured is deceased and was eligible for an old age or invalidity pension, the spouse will receive that pension for life. If the spouse who was receiving the pension becomes deceased, it will be divided equally among the children until they turn 18 (or in the case of daughters, until they marry). If the insured person has not left a spouse or children behind, the parents of the insured would be entitled to the survivor's pension for 5 years.

Employers must submit both their and their employee's contributions to a bank designated by the Employees’ Old-Age Benefits Institution (EOBI) by the 15th of each month. The federal minimum wage for calculating contributions has been raised to PKR 13,000 under the amendment in the Minimum Wages for Unskilled Workers Ordinance, 1969.

In Islamabad Capital Territory:

• The employer pays 5% of PKR 13,000 = PKR 650.
• The employee pays 1% of PKR 13,000 = PKR 130.

In Punjab, Sindh, Khyber Pakhtunkhwa (KPK), and Balochistan, where the minimum wage remains PKR 8,000:

• The employer pays 5% of PKR 8,000 = PKR 400.
• The employee pays 1% of PKR 8,000 = PKR 80.

Dependents/Survivors Benefits

Survivors are entitled to benefits if the deceased insured member was in employment for at least 36 months or entitled to retirement or disability pension at the time of their death. Eligible beneficiaries include surviving spouse, children under 18, and surviving parents. The amount of pension is the same as the deceased member was receiving or was entitled to receive. It is split equally among the survivors.

If the deceased was eligible for an old age or invalidity pension, the spouse would receive that pension for life. If the spouse who was receiving the pension becomes deceased, it will be divided equally among the children until they turn 18 (or in the case of daughters, until they marry). If the insured person has not left a spouse or children behind, the parents of the insured would be entitled to the survivor's pension for 5 years.

Employers must submit both their and their employee's contributions to a bank designated by the Employees’ Old-Age Benefits Institution (EOBI) by the 15th of each month. The federal minimum wage for calculating contributions has been raised to PKR 13,000 under the amendment in the Minimum Wages for Unskilled Workers Ordinance, 1969.

In Islamabad Capital Territory:

• The employer pays 5% of PKR 13,000 = PKR 650.
• The employee pays 1% of PKR 13,000 = PKR 130.

In Punjab, Sindh, Khyber Pakhtunkhwa (KPK), and Balochistan, where the minimum wage remains PKR 8,000:

• The employer pays 5% of PKR 8,000 = PKR 400.
• The employee pays 1% of PKR 8,000 = PKR 80.

The contributory provincial social security schemes also provide for survivors' pensions when an insured employee dies as a result of an employment injury. The amount of pension is the same as the deceased member was receiving or was entitled to receive. It is split equally among the survivors. Minor children receive 20% of the pension. If the child has lost both parents, the pension amount is 40%.

Under the provincial Workmen’s Compensation Acts, employers are liable to pay employees’ survivors compensation for an employee’s death due to employment injury. The amount of benefit is fixed by the law. The amount is PKR 300,000 (Pakistani Rupee) in Khyber Pakhtunkhwa and PKR 500,000 in Punjab, Sindh, and Balochistan. Survivors are not eligible for compensation if the accident is caused by being under the influence of alcohol or drugs or negligence of safety measures by the employee.

Invalidity Benefits

Employees are entitled to a disability pension if they are younger than the normal retirement age and have at least 67% assessed disability. They must have paid at least 5 years of contributions, including 3 years in the last 5 years before the disability began, or paid at least a total of 15 years of contributions. The amount of pension is 2% of the average monthly wages per year of insurable employment.

In addition to this, there are contributory provincial social security schemes that provide benefits in case of disability due to a work-related injury or disease. Employees who sustain total or partial disability receive pension according to the degree of disability. If a disability pension has been paid for 5 years it shall be payable for life. In case of minor disability, a disability gratuity is paid, whose amount is fixed on the basis of the degree of disability and years of service.

Under the provincial Workmen’s Compensation Acts, employers are liable to pay employees compensation for any employment injury that causes total or partial disability. The amount of benefit is fixed by the law. The amount is PKR 300,000 (Pakistani Rupee) for total permanent disability in Khyber Pakhtunkhwa and PKR 500,000 in Punjab, Sindh, and Balochistan. Employees are not eligible for compensation if the accident is caused by being under the influence of alcohol or drugs or negligence of safety measures by the employee.

According to the provincial Factories Acts of Pakistan, no child under the age of 14 can be allowed to work in a factory. This age is increased to 15 in the province of Punjab. The minimum age for hazardous work is 18 years. All adolescents under 18 must submit a medical certificate of fitness. No adolescent can be employed to work between 7:00 PM and 8:00 AM the following day. The total working duration must not exceed 7 hours in a day, including rest breaks, except in the province of Balochistan, where they can be allowed to work for up to 8 hours, including breaks. They must be given 1 holiday in a week. They cannot be permitted to work overtime.

Employers must maintain a register of young workers, indicating:

• The name and age of each young worker in the factory
• The nature of their work
• The group, if any, in which they are included
• Shift schedule, if any
• The number of their certificate of fitness