Permanent Employment:

There are no special provisions in Nepal's Labour Act concerning permanent employment. The only reference in the law defines permanent employment as regular employment of indefinite duration that does not have as its objective the completion of a particular task or service or engagement for a specific period.

Regular or permanent employees in seasonal industries are entitled to at least 25% of their remuneration during their workplace's seasonal closure.

Fixed-Term or Specific-Purpose Contracts:

Nepal's Labour Act stipulates that if a company needs an immediate increase in production or service, any person may be appointed by contract for this purpose. The contract must outline the time-period, remuneration scheme, and terms of service for any specified work that is not permanent. The modes of hiring include time-bound and work-based employment. No one can be hired for employment without a contract.

Temporary Employment:

Temporary employment contracts are defined as those made to complete particular work or a specific service.

Employers can hire temporary employees through licensed employment agencies for work other than their core activity. Employers must also conclude service agreements with the agency. Additionally, temporary employees cannot be paid less than minimum wage by their agencies. The employer must ensure payment of remuneration. Finally, temporary employees must be provided with similar occupational health and safety provisions as those of the employer's regular employees. An employment agency can provide employees to a particular employer only twice.

Written Agreements:

Nepal's Labour Act does not make written contracts mandatory. As a result, agreements can be made orally. When they are concluded in writing, employment contracts must contain information on working conditions, remuneration, date of starting the contract, job designation and other relevant terms. Contracts must be provided to employees within 1 month of their start date.

Nepal's Labour Act states that employees can be dismissed for acting in collaboration with a competitive employer or carry on any competitive business on their own, or provide any secret information of the enterprise when they are employed by any competitive employer.

Oral Agreements:

Nepal's Labour Act recognizes employment contracts made orally.

Implied Agreements:

Nepalese law enforces indirect or quasi-contracts. Therefore, an oral or written agreement need not be concluded for there to be an existing contract. A contract will be implied in case any person gives anything to another person or employs them in any work, to pay the appropriate cost or remuneration.

In Nepal, the employment relationship is predicated on a probationary period of continuous service lasting 6 months or a full running season in the case of seasonal employment. After this period, the worker will be appointed permanently and provided with an appointment letter confirming the position title, the conditions of service, and the entitled remuneration. If the employer is not satisfied with the employee's performance, they can terminate the employment contract without notice.

In Nepal, regular working hours are 8 hours per day and 48 hours per week. Working hours of employees under 16 years of age cannot exceed 6 hours per day and 36 hours per week. Any work carried out in addition to regular working hours is considered overtime and must be paid at a rate of 150% of the employee's regular wages. The maximum overtime period may not exceed 4 hours per day and 24 hours per week.

In Nepal, it is prohibited to employ a child under 14 years of age in any type of work. Employers must obtain approval from the Labour Office and parents or guardians of children before employing minors. Minors must undergo a medical examination to prove their fitness for the job.

Work hours of children between 14 and 16 years must not exceed six hours per day and 36 hours per week. Children younger than 16 cannot be employed in hazardous work. Also, children must be provided with a rest break of 30 minutes after working continuously for 3 hours. It is prohibited for children to be employed in any job between 6:00 PM and 6:00 AM.

Minors are also entitled to 1 day of paid home leave for every 20 days of work done by them. They receive 24 days of fully paid sick leave, 10 days of education leave, and 30 days of special leave per year.

January 12 - Prithvi Jayanti

January 15 - Maghe Sankranti

February 19 - National Democracy Day March 8 - Nari Dibas

March 8 - Maha Shivaratri

April 13 - Nepali New Year

April 17 - Ram Nawami

May 1 - Majdoor Divas

May 23 - Buddha Jayanti

May 28 - Ganatantra Diwas (Republic Day) August 19 - Janai Purnima

August 20 - Gai Jatra

August 26 - Shree Krishna Janamashtami September 19 - Constitution Day

October 3 - Ghatasthapana

October 10 - Phulpati (Dashain)

October 10 - Astami (Dashain)

October 11 - Nawami (Dashain)

October 12 - Dashami (Dashain)

October 13 - Ekadashi (Dashain) November 1 - Laxmi Puja (Tihar) November 2 - Gobhardan Pujan (Tihar) November 3 - Bhai Tika (Tihar)

November 7 - Chhat Parwa

In Nepal, annual leave (called 'home leave') is granted at the rate of 1 day for 20 days of work, up to a maximum of 18 days per year. It is fully paid. However, as a general principle, leave is not seen as a right but as a privilege.

Annual leave accumulates up to a maximum of 90 days. Any excess accumulation is cashed in every year.

If an employee's contract is terminated or they die, the payment for unused leave is made to them or their family members.

January 11 - Prithvi Jayanti

January 14 - Maghe Sankranti

February 19 - National Democracy Day February 26 - Maha Shivaratri

March 8 - Nari Dibas

April 6 - Ram Nawami

April 13 - Nepali New Year

May 1 - Majdoor Divas

May 12 - Buddha Jayanti

May 28 - Ganatantra Diwas (Republic Day) August 9 - Janai Purnima

August 10 - Gai Jatra

August 16 - Shree Krishna Janamashtami September 19 - Constitution Day September 22 - Ghatasthapana September 29 - Phulpati (Dashain) September 30 - Astami (Dashain)

October 1 - Nawami (Dashain)

October 2 - Dashami (Dashain)

October 3 - Ekadashi (Dashain)

October 20 - Laxmi Puja (Tihar)

October 23 - Bhai Tika (Tihar)

October 27 - Chhat Parwa

November 22 - Gobhardan Pujan (Tihar)

Nepal's Labour Act entitles workers to fully paid sick leave of up to 12 days per year. If the employee has worked for the employer for less than 1 year, sick leave is granted in proportion to the employment period. Employees can accumulate sick leave up to a maximum of 45 days and must be paid their basic remuneration for accumulated sick leave of over 45 days at the end of the year.

Nepal's New Labour Act provides maternity leave of up to 14 weeks (~98 days), out of which 60 days are fully paid. Employees must take compulsory leave from 2 weeks before and until 6 weeks after delivery. This leave is also granted in case of stillbirth or miscarriage after 7 months of pregnancy. If recommended by the doctor, an employee can extend her maternity leave by a month.

The employer is responsible for paying the employee their regular remuneration for the first 60 days of maternity leave, while Nepal's Social Security Fund provides benefits for the remaining 38 days of maternity leave. The fund also provides NPR 7,500 (Nepalese rupee) per delivery up to 2 times.

In the case of the mother's death within 60 days of the child's birth, her husband or partner becomes entitled to the remuneration from the employer for the remaining period.

Minimum Wage:

The minimum wage for employees in Nepal was last set on August 27, 2023, and is currently as follows:

• For tea estate employees - Monthly minimum wage of NPR 13,893 (Nepalese rupees), daily minimum wage of NPR 500, and hourly minimum wage of NPR 66

• For non-tea plantation employees - Monthly minimum wage of NPR 17,300, daily minimum wage of NPR 668, and hourly minimum wage of NPR 89.

Nepal's Labour Act requires salary payments at least once a month. For employees working for less than a month, payment must be made within 3 days of the completion of their work. For casual employees, payment must be made immediately after the completion of the work.

Overtime, Holiday and Vacation Pay:

Nepal's New Labour Act provides for overtime after the maximum working hours (eight per day and 48 per week) have been exceeded. The overtime limit for any employee is four hours a day and 24 hours a week. Payment is stipulated at 1.5 times the basic remuneration. The 30- minute break rule after 5 hours of work applies in the context of overtime. Part-time employees are also entitled to an overtime premium.

Employees are entitled to paid annual leave at the rate of 1 day for 20 days of work. Employees working on public holidays receive a replacement holiday within 21 days.

Nepal's Labour Act provides for fully paid paternity leave of up to 15 days. The leave can be taken once the wife of the male employee begins labor.

Notice Period:

Both employers and employees must provide notice before submitting a letter of employment termination, except in cases of dismissal for misconduct. The notice period correlates with the service period and ranges from 1 day (for employment up to 4 weeks) to 30 days (for more than a year of employment).

If any party fails to provide an appropriate notice period to the other party, they are liable to pay the remuneration for the period of such notice to the other party.

Severance Benefits:

In Nepal, employees dismissed for redundancy are entitled to severance benefits of 1 month's basic wages for every year of service. Employees that have less than 1 year of service receive severance benefits in proportion to their service period.

Pension:

In Nepal, contribution to the Social Security Fund is mandatory for employees and employers.

Old age benefits are paid to employees who have reached 58 years of age (or 60 years for government employees). If the employee has completed 20 years in service, they will be eligible for a lifetime pension. The monthly pension amount is calculated as the number of years of contributions multiplied by the last salary amount divided by 50. If the employee has not completed 20 years of contributions, they receive the total amount of contributions made to the fund, plus accrued interest in the form of a lump sum grant.

A universal social assistance scheme provides a social allowance for senior citizens 68 years of age or older (60 years for Dalits and single women). It is funded by the Government of Nepal.

Dependents/Survivors Benefit:

In Nepal, if an employee who has completed 20 years of service dies, their survivors are paid a family pension in the amount of 50% of the pension the employee was entitled to receive. Survivors include spouses and minor children under the age of 18 years.

Widows under 60 years of age who cannot work also receive social assistance allowance of NPR 2,000 per month funded by the government.

Employers must provide insurance coverage of at least NPR 700,000 (Nepalese rupees) to their employees against work accidents. In case of an employee's death due to a work-related accident, their survivors receive 100% of the sum insured as a lump sum benefit.

Invalidity Benefit:

The Employee Provident Fund of Nepal does not cover pensions due to disability. It covers employees' medical treatment expenses up to a maximum of NPR 100,000 (Nepalese rupees) if workers have paid contributions for at least six months. If an employee leaves employment due to disability before reaching retirement age, they will be granted the total amount in their provident fund. A maximum of NPR 1,000,000 is paid in case of fatal diseases.

There is a social assistance allowance of NPR 3,000 per month for citizens with a total and permanent disability. Citizens with partial disability are entitled to receive NPR 1,200 per month.

Compensation for disability due to work accidents or diseases is paid by employers, depending on the degree and type of disability.

Personal Income Tax:

The fiscal year runs from July 15 to July 14 of the following year. Residents are taxed on all of their income, while non-residents are taxed only on their income sourced in Nepal. Assessment is done differently for individuals and couples. Current rates range from 1% - 39% for residents. Non-residents are taxed depending on the type of income.

Types of Visas:

In Nepal, the Department of Immigration outlines the following visa types:

• Diplomatic visa - This visa is issued to holders of diplomatic passports based on reciprocity.

• Official visa - This visa is issued to persons employed in Nepal-based offices of foreign consulates and United Nations agencies. Tourist visa - This visa is issued to foreign nationals who enter Nepal for tourism for a maximum of 150 days a year. It is extendable by a maximum of 90 days.

• Study visa - This visa is issued to foreign nationals who wish to study, teach, or conduct research work in any of Nepal's educational institutions. It is granted for a year at a time and is extendable.

• Non-tourist visa - This visa is issued to foreign nationals involved in social or economic development activities approved by the Government of Nepal (and financed by other nations' governmental institutions). It is also issued to journalists, workers receiving remuneration from any firm/company/association/industry or company within Nepal, or Nepalese citizens' spouses.

• Business Visa - This visa is issued to foreign nationals who enter Nepal to invest in any trade or industrial enterprise or make an investment to carry on export trade from Nepal.

• Transit Visa - This visa is issued for one day to foreign nationals on their way to any other country via Nepal.

• Non-residential visa - This visa is issued to foreign nationals of Nepalese origin residing in a foreign country. Applicants must intend to either live in Nepal, carry on trade/business in the country, study, teach, or conduct research work in any subject in Nepal. It is granted for ten years at a time.

• Residential visa - This visa is issued to foreign nationals who wish to settle in Nepal and invest at least USD 100,000 (US dollars). Alternatively, it is issued to individuals of international repute or persons who intend to spend their lives in Nepal without carrying on any business.

Work Permit:

Foreign nationals hired for work in Nepal must request a work permit from the Department of Labour. Employers must apply for a work permit for their employees. It is also compulsory to produce a written employment agreement in a language understandable by foreign employees or in English. The validity period of a work permit is three years unless otherwise stated in the employment contract.

Employees who are provided diplomatic immunity, have written arrangements based on a treaty or agreement with the Government of Nepal, or are employed as technicians for three months or less to repair machinery or install new technology may proceed without a work permit. Employees also require a working visa from the Department of Immigration.