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Labor Law in Nepal

by dbusiness

Nepal promulgated a new labor law in 2074 (2017 AD) with several new provisions.  The new law was applicable from 4 September 2017.

The previous Labor Act, 2048 was applicable only to the entity where 10 or more employees or workers were engaged in the work. Labor Act, 2074 is applicable to all entities regardless of number of workers/employees.

The law is applicable to all entities/persons except:

  • Civil service,
  • Nepal Army, Nepal Police, Armed Police Force,
  • Entities incorporated under other prevailing laws or situated in Special Economic Zones to the extent separate provisions are provided.
  • Working journalists, unless specifically provided in the contract

This also includes organizations with or without any motive to make profit.

Weekly hours

Nepal follows 8 working hours and 48 hours a week rule as given by section 28 of Labor Act, 2074. This is continuity of working hours provision in the previous labor law.

If any worker or employee is engaged to work for more than eight hours in a day or 48 hours a week, he/she shall be paid overtime wages at the rate of one and half time of his/her ordinary rate of wages. This provision is also a continuity of the provision in the previous labor law.

Holiday requirements

Minimum holiday requirements for employees are prescribed as below.

  • Weekly Holiday – 1 day every week
  • Public Holiday – 13 days including May Day. Additional 1 day to female employees including International Women Labor Day.
  • Annual Leave – 1 day for every 20 worked days.
  • Sick Leave – Half paid up to 15 days. Eligible after completion of 1 year of service.
  • Mourning Leave – 13 days
  • Leave in Lieu – For the laborers put in work on public holiday or weekly off.
  • Maternity Leave – 98 days. Fully paid up to 60 days.
  • Paternity Leave – 15 days. Fully Paid.

Employment Contract

As per Sec. 11 of the Act, no employer shall employ any worker without entering into employment contract. In case of casual employment, written employment contract is not necessary. The contract should include remuneration, benefits, employment conditions and other matters specified by the Act.

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