Nepal Legislation Labor Act 2074

The Labor Act of Nepal, 2048, has been replaced with the new Labor Act, 2074. The Nepal Labor Act is the primary law governing labor relations and employment in Nepal. It outlines the rights and obligations of both employers and employees, as well as the procedures for dispute resolution and labor inspections.

Some of the key provisions of the Nepal Labor Act include:

  1. Working hours and overtime: The Act sets a maximum of eight hours of work per day and 48 hours per week for employees. Employers are required to pay overtime for work beyond these limits.
  2. Wages and benefits: The Act requires employers to pay employees at least the minimum wage set by the government, and provides for paid leave, sick leave, and maternity leave.
  3. Health and safety: Employers are required to ensure a safe and healthy workplace for employees, and to provide appropriate protective equipment and training.
  4. Dispute resolution: The Act provides a range of mechanisms for resolving disputes between employers and employees, including conciliation, mediation, and arbitration.
  5. Labor inspections: The Act establishes a system of labor inspections to ensure that employers are complying with labor laws and regulations.
  6. Employment contract: Employers are required to provide a written employment contract to employees. The contract should include details such as wages, working hours, leave entitlements, and termination provisions.
  7. Leave entitlements: Employees are entitled to various types of leave, including annual leave, sick leave, maternity leave, and paternity leave.
  8. Termination: Employers can only terminate employees for just cause and must follow a specific procedure. Employees who are terminated without just cause are entitled to compensation.
  9. Social security: Employers are required to contribute to a social security fund on behalf of their employees, which provides benefits such as health insurance and retirement benefits.
  10. Labor unions: The Labor Act allows employees to form labor unions and engage in collective bargaining with their employers.

The Nepal Labor Act also provides specific protections for women, children, and other vulnerable groups, and prohibits discrimination based on race, gender, religion, or disability.

Overall, the Nepal Labor Act is an important piece of legislation that helps to ensure that workers in Nepal are treated fairly and that employers meet their obligations to provide safe and decent working conditions.

  • Prohibition of Non-Nepalese People at Work: If foreign nationals do obtain work in Nepal, they need to request a work permit as per section 22 and 23 of the Labor Act (2074). However, if they are provided diplomatic immunity or have some written arrangement based on a treaty or agreement with the Government of Nepal, they may proceed without a work permit.
  • Working Hours Overtime: Section 30 states maximum could be 24hrs
  • Leaves: Annual leave days in Nepal are decided based on the number of days an employee works with a company.  Nepal’s Labor Act entitles workers to fully paid sick leave up to 12 days per year. If the employee has worked for the employer for less than one year, sick leave is granted in proportion to their employment period. In case of death and mourning, employees are allowed up to 13 days of leave from work. Pregnant or nursing mothers are allowed a total of 98 days off from work based on their maternity leave. They are fully paid for up to 60 days. Paternity leave, on the other hand, is given for 15 days and is fully paid during this period.
  • The Sexual Harassment at Workplace Prevention Act, 2015 (2071) (“Sexual Harassment Prevention Act” or “Act”) :  to protect the right of every individual to work in a safe environment.

Types of Employment as per Nepal Labor Act

The Labor Act of Nepal recognizes various types of employment. Some of the main types of employment recognized by the act are:

  1. Permanent employment: This is the most common type of employment and refers to a long-term employment relationship between an employer and an employee, with no fixed end date.
  2. Fixed-term employment: This refers to an employment relationship that has a fixed end date. Employers can hire employees on a fixed-term basis for a specific project or period of time.
  3. Part-time employment: This refers to employment where an employee works fewer hours than a full-time employee. Part-time employees are entitled to certain benefits and protections under the Labor Act.
  4. Casual employment: This type of employment is irregular and unpredictable, with no fixed hours or schedule. Casual employees may be hired on an as-needed basis, for example, to cover temporary staff shortages.
  5. Contractual employment: This refers to an employment relationship where the terms and conditions of employment are set out in a written contract between the employer and the employee.
  6. Probationary employment: Employers can hire employees on a probationary basis for a period of up to six months. During this time, employers can assess the employee’s suitability for the job, and employees have fewer protections under the Labor Act.

Overall, the Labor Act of Nepal recognizes various types of employment, each with its own set of rights and protections. It is important for employers and employees to understand their respective rights and obligations under the act.

Remuneration Act

The Remuneration Act of Nepal was enacted in 1976 and it governs the payment of wages and other benefits to employees. The act applies to all employers and employees in Nepal.

Under the Remuneration Act, the minimum wage for different industries and sectors is set by the government. The minimum wage is revised periodically based on inflation and other factors. As of September 2021, the minimum wage in Nepal is NPR 15,000 per month.

In addition to the minimum wage, the Remuneration Act requires employers to provide other benefits to their employees, such as overtime pay, holiday pay, and sick leave. The act also sets out the procedures for the payment of wages, including the timing of wage payments and the deductions that can be made from wages.

It is important to note that the Remuneration Act applies only to employees who are covered by the act. Some categories of workers, such as domestic workers and seasonal workers, may not be covered by the act.

Overall, the Remuneration Act of Nepal provides minimum wage and other benefits to workers, and regulates the payment of wages and other benefits by employers. The monthly minimum wage as of September 2021 in Nepal is NPR 15,000.

  • Minimum remuneration/wage: The minimum remuneration was revised by the Ministry of Labour, Employment and Social Security on 03 May of 2021. The new minimum remuneration applicable from 16 July 2021 is NPR 15,000 per month. Overtime remuneration must be 1.5 times the regular remuneration.
  • Increment of the remuneration: Annual increment is applicable to an employee who has worked for at least 1(one) year and must be at the rate of half-day salary of the monthly basic remuneration.
  • Payment of remuneration: Under the Remuneration Act of Nepal, employers are required to pay their employees at regular intervals, which must not exceed one month. The act also sets out specific rules for the payment of wages for different categories of workers.
    • Permanent employees: Employers must pay permanent employees at least once a month, on a regular payday that is agreed upon by both the employer and the employee.
    • Fixed-term employees: Employers must pay fixed-term employees at the end of their employment contract, or at regular intervals not exceeding one month, whichever comes first.
    • Part-time employees: Employers must pay part-time employees at regular intervals not exceeding one month. The amount paid should be in proportion to the hours worked by the employee.
    • Casual employees: Employers must pay casual employees at the end of each day or shift worked.
    • Probationary employees: Employers must pay probationary employees at regular intervals not exceeding one month.

Holidays and Leave

The Labor Act of Nepal provides for various types of leave and holidays for employees. Some of the key provisions related to holidays and leave are:

  1. Annual leave: Employees are entitled to a minimum of 13 days of paid annual leave each year, which can be taken after completing one year of continuous service. The leave can be accumulated up to a maximum of 45 days.
  2. Sick leave: Employees are entitled to a minimum of 12 days of paid sick leave each year, which can be accumulated up to a maximum of 90 days.
  3. Maternity leave: Female employees are entitled to 16 weeks of maternity leave, which includes 8 weeks of postnatal leave. The leave is paid at the employee’s normal rate of pay.
  4. Paternity leave: Male employees are entitled to 15 days of paid paternity leave, which can be taken within 30 days of the birth of their child.
  5. Public holidays: Employees are entitled to 13 public holidays each year, which include national holidays and festivals.
  6. Bereavement leave: Employees are entitled to 13 days of paid bereavement leave in the event of the death of an immediate family member.

In addition to these types of leave, the Labor Act also provides for other types of leave, such as leave for family reasons and leave for religious festivals.

Overall, the Labor Act of Nepal aims to provide employees with adequate leave and holiday entitlements to maintain a healthy work-life balance and promote the well-being of workers.

Equality and Discrimination in Nepal

Equality and non-discrimination are fundamental human rights that are protected under the Constitution of Nepal and various other laws in the country. However, discrimination based on ethnicity, gender, religion, caste, disability, and sexual orientation remains a significant issue in Nepal.

The Constitution of Nepal prohibits discrimination of any kind, and guarantees the right to equality before the law and equal protection of the law. The Constitution also provides for affirmative action measures to address historical discrimination and promote equality, particularly for marginalized and disadvantaged groups.

Despite legal protections, discrimination remains a significant issue in Nepal. Discrimination based on caste is particularly prevalent in the country, and members of lower castes often face discrimination and exclusion from various social and economic opportunities.

Gender discrimination is also a significant issue in Nepal, with women facing various forms of discrimination and violence, including domestic violence, sexual harassment, and trafficking.

Discrimination against ethnic and religious minorities is also a concern in Nepal, with some groups facing discrimination and marginalization in various aspects of life, including education, employment, and access to healthcare.

Overall, while legal protections exist, more needs to be done to ensure equality and non-discrimination for all individuals in Nepal. This includes greater efforts to address structural inequalities, promote affirmative action measures, and combat discrimination in all its forms

For More Detail Please click Labour law in Nepal: Highlights of the Labour Act, 2017

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