Labor law in Nepal

Nepal's Labour Act 2017, supported by Labour Rules 2018, applies to companies, private firms, partnerships, cooperatives, associations and other organizations in industry, business and services, whether they operate for profit or not. A foreign enterprise operating in Nepal is also covered for its representatives and employees. Domestic work is included under special rules. Civil service, the Nepal Army, Nepal Police, the Armed Police Force and the National Investigation Department follow separate systems. Special rules may also apply in special economic zones, and working journalists are outside the Act unless their contract adopts it. The law prohibits forced labor and discrimination based on factors such as religion, color, sex, caste, tribe, origin, language and ideology. Equal-value work must receive equal pay regardless of sex. A child is below 18 years of age. Employment below 14 is prohibited, hazardous work is prohibited for anyone below 18, and workers aged 14 to 17 may work only within limits of six hours per day and 36 hours per week, without work between 18:00 and 06:00. Employment normally requires a contract stating remuneration, benefits, working conditions and other prescribed matters. The main forms are regular, work-based, time-based, casual and part-time employment. Casual employment covers work of no more than seven days within one month and is the main exception to the written-contract requirement. Part-time work means no more than 35 hours per week. The employment relationship begins when work or service begins. Probation may last up to six months; if the employer does not end the relationship during probation, the worker is confirmed by operation of the law. Apprentices work under an educational-institution agreement and approved curriculum, with limits of eight hours per day and 48 hours per week. Trainees may serve for up to one year and receive at least the minimum remuneration and social-security benefits. A labor supplier must be licensed and may supply workers only for non-core work. The main employer remains responsible for violations, and a supplier may not charge a fee or commission to the worker. Foreign workers need a work permit, and the employer generally must show that suitably skilled Nepali workers are unavailable and publish a national vacancy notice. A foreign employment contract normally follows the Act's standards and has a default maximum term of three years unless it states another period. Normal working time is limited to eight hours per day and 48 hours per week. After five hours of work, the worker receives a 30-minute break, which counts as working time. Overtime is limited to four hours per day and 24 hours per week and is generally not enforceable, except in situations involving danger to life, safety or health or a substantial risk of serious damage. Overtime pay is one and a half times basic remuneration. An employer must provide transport when a woman starts work after sunset or finishes before sunrise. Weekly leave is one day. Paid public leave is 13 days per year, including May Day, and female workers receive 14 days, including International Women Labour Day. A substitute day must be provided within 21 days when applicable. Home leave accrues at one day for every 20 days worked, sick leave is 12 paid days per year, maternity leave is 14 weeks with at least two weeks before and six weeks after birth, and full pay is provided for 60 days. Paternity or maternity-care leave is 15 days, and mourning leave is 13 paid days. Home leave may accumulate up to 90 days and sick leave up to 45 days. Other forms of leave often depend on the employer's facility or the applicable rules rather than creating an unconditional entitlement. A worker's pay begins on the first working day and the pay interval may not exceed one month. After one year, the annual increment must be at least half a day's remuneration calculated on monthly basic pay. A festival expense equal to one month's basic pay is separate from the statutory profit bonus. From 17 July 2025, the general minimum remuneration is NPR 19,550 per month, made up of NPR 12,170 basic pay and NPR 7,370 dearness allowance; the daily minimum is NPR 754, the hourly minimum is NPR 101 and the part-time minimum is NPR 107 per hour. Tea plantations have a separate rate. An eligible profit-making enterprise allocates 10% of net profit under the Bonus Act 2030, generally after at least half a fiscal year; casual and shift workers are excluded from that scheme. Lawful deductions include tax, legally required fees, provident-fund, insurance and social-security contributions, judicial or arbitral orders, approved facilities, absence, proven reckless or intentional loss, collective-agreement deductions, union fees and employer loans or advances. Where the Social Security Fund, or SSF, does not apply, the statutory fallback can include a provident-fund contribution of 10% from the worker and 10% from the employer, gratuity of 8.33% of basic monthly pay, medical insurance of at least NPR 100,000 per year and accident insurance of at least NPR 700,000, with the employer paying the accident-insurance premium. Under the formal SSF contribution structure, the total is 31% of basic pay, consisting of 11% from the worker and 20% from the employer. SSF schemes cover medical care, health and maternity, accidents and disability, dependent family support and old age. Registration and contribution procedures for informal and self-employed workers have operated since 2080, and government, provincial or local co-contributions may be available. SSF participation does not automatically replace every right under the Labour Act, such as contractual pay or protection against unlawful termination. Employers must formulate, register and implement an occupational safety and health policy. They must control chemical, physical and biological risks, provide information and training in an understandable language, keep entry and exit routes safe and provide protective equipment without charging workers. Workers must follow safety instructions and use the equipment. A worker facing immediate danger may report it and, where justified, stop work while the Labour Office makes a binding decision. Employers must promptly report accidents, deaths and occupational diseases. Pregnancy requires suitable or easier work without reducing pay. Sexual harassment at the workplace or during work is prohibited and may lead to dismissal. A trade union, victim or family member may complain against an employer or chief executive. Workers may form or join a trade union and take part in union activity. An enterprise with at least 10 workers must have a Collective Bargaining Committee. Without an authorized union, representatives may be selected with signatures from more than 60% of the workers. The employer must respond to a negotiation notice within seven days. If negotiations fail after 21 days, the Labour Office can mediate for up to 30 days. Arbitration becomes mandatory in cases such as an agreement requiring it, essential services, special economic zones or a state of emergency. A strike follows statutory procedures and requires written notice at least 30 days in advance to the employer, local administration and Labour Office; guards and sentries on duty are excluded. Union interference, retaliation, harassment, unlawful lockouts, assault and coercion are unfair labor practices. An individual claim normally begins with a written complaint to the employer, who must provide a receipt and has 15 days to settle it. If the employer does not discuss the complaint within seven days or no settlement is reached after 15 days, the worker may apply to the Labour Office for mediation. The Office has 21 days for settlement and may issue a decision within the following 15 days. Labour Offices and the Department of Labour and Occupational Safety inspect compliance and handle matters such as minimum pay, unlawful deductions, provident-fund, gratuity, SSF, insurance, contracts, discrimination, labor supply and foreign work permits. The Labour Court hears relevant appeals and serious occupational-safety or forced-labor matters; the applicable appeal period is generally 35 days. Employment security requires a proper and sufficient reason. Time-based employment ends when its term ends, work-based employment ends when the specified work ends and casual employment may end at the will of either side. A written resignation is accepted within 15 days or is treated as accepted afterward. For incompetence, an enterprise with at least 10 workers generally needs unsatisfactory performance for at least three consecutive years and must give at least seven days to clarify. Health incapacity normally requires medical recommendation, while work accidents and occupational diseases receive special protection. Except for misconduct, notice is one day for employment up to four weeks, seven days for more than four weeks up to one year and 30 days for more than one year; the employer pays equivalent remuneration when notice is not given. For misconduct, the worker receives seven days to provide clarification, although serious grounds may justify dismissal. Retrenchment for financial problems, redundancy or closure requires consultation and 30 days' advance notice. Compensation is one month's basic pay for each completed service year, proportionally for less than one year, and is not added again where unemployment allowance applies. This retrenchment procedure excludes employers with 10 or fewer workers. Compulsory retirement is at 58. Final remuneration and benefits are due within 15 days, and the employer must provide an experience certificate on request.