Labour Law Nepal

The Labour Act, 1992 lays down the legal framework and the basis for the rules, regulations and guidance on the proper management of any establishment employing 10 persons or more.
It deals with matters relating to employment and security of employment, working hours and minimum wages, welfare of employees, employer employee relations and the settlement of labour disputes.
Labour Regulation, 1993 complements the Labour Act with further clarification in issues such as security of profession and service, remuneration and welfare provision, health, cleanliness and safety, etc.
The Bonus Act of 1974 provides a legal basis for the payment of bonus to the workers and employees of factories and commercial establishments.
The low cost of living enables workers to offer their services at relatively low wage rates. The minimum wage rates set by the government are generally lower than the going wage rates for workers. Salaries of middle management executives, technical grade officers, engineers and other professionals are generally lower than in other developing countries. Permanent employees of a factory should contribute 10 percent of the monthly salary to a provident fund and the management should make a matching contribution. Gratuities are payable to workers who have worked for over 3 years.
Working Hours, Holidays
Normal working hours are fixed at 48 hours per week, 8 hours a day. Continuous working hours should not exceed 5 hours. There should be a break of half an hour. Overtime work is remunerated at one and a half times the normal wage. In addition to 13 public holidays, permanent workers are entitled to one day's home leave for every 20 days, 15 days medical leave with half pay and one month special leave without pay every year. Female employees are entitled to 52 days maternity leave with full pay. Such maternity leave shall be granted only twice during the entire period of service. The compulsory retiring age for workers is 55. However, in the case of a skilled worker whose service is indispensable, the retirement age could be extended up to 60 years.
Nepal's law establishes a minimum age for employment of children at 14 years. The Constitution of Nepal stipulates that children shall not be employed in factories, mines, or similar hazardous work. The Constitution also forbids slavery, bonded labor, and the trafficking of individuals.
Other important child labor laws include the Children's Rights and Welfare Act 1992. This Act defines child as a person who has not reached the age of 16. Article 17 prohibits the employment of children who have not attained the age of 14 years. This legislation prohibits forced labor, requires equal remuneration for equal work (Art. 17), and prohibits employment of children in hazardous work (Art. 18). Child laborers are entitled to leisure for a half-hour for every three hours of work, and one day off every week (Art. 47). The Labor Act of 1992 prohibits employment of minors under 14 years of age and regulates the work hours of "minors" between the ages of 14 to 18. This Act applies to children working in urban industries and provides for labor inspectors in each district.
The Nepal Department of Labor has a "spotty" enforcement record. However, the government's action has been inadequate to reduce the incidence of child labor. Although factories were "penalized" for employing children, sanctions were never enforced.
Education is not compulsory in Nepal. The government has a stated policy of providing free education through the 6th grade, but this policy reportedly is not implemented. Anti-Slavery International and Child Workers in Nepal (CWIN) states that the government offers free tuition and textbooks and tuition for children in grades one to three, and grades four and five for children in rural areas. Parents, however, still have to provide stationary, which can amount to rupees 200 (approximately $4.54) per child per year. This is a substantial financial burden, especially on poor families. Moreover, access to schools is limited, especially in rural areas, and most schools have no latrines or drinking water.
In Nepal, wage structure is very weak and limited. Incentive earnings are very few and limited to a few enterprises. Fringe benefits like residence facility or allowance, Medicare, educational facilities for the children, transportation, ration, child care centres, entertainment, life insurance, credit facilities etc. are limited to a few establishments and are far from the access of the workers of most of the industries and services.
A few provisions of social security have been included in the Labour Act 1992. Among them are sick leave, maternity leave of 45 days, workmen's compensation, provident fund & gratuity as the old age benefit. Besides, Childcare centres, canteen and welfare officer in every enterprise are other provisions.
But the Act covers the establishments with more than 10 workers & the industrial estates and hence too limited in its coverage. Moreover, the responsibility of these provisions is solely left to the employers. The schemes of social insurance or security based on funds created by the tripartite contributions of workers, employers and the government are non-existent. Thus, we are in a phase of infancy with regard to social security.