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Nepal - Minimum Wages - 2011


LAST UPDATE

3 May 2011

SOURCES


Name of Act

Notice 1 of the Government of Nepal on the Minimum Wage for Agricultural Labour 2008, Nepal Gazette (2008), Part 58, Supplementary 25 (e), pp. 1-3 (published 18 November 2008)
(unofficial translation: Dr. Gautam, Tribhuvan University, Kathmandu)

Name of Act

Notice 2 of the Government of Nepal on the Minimum Wage for workers of all other enterprises, Nepal Gazette (2009), Part 58, No. 34, pp. 7-8, published 8 Feburary 2009 (unofficial translation: Dr. Gautam, Tribhuvan University, Kathmandu)

Name of Act

Labour Act, dated 15 May 1992, Nepal Recorder, 12 June 1992, Vol. 16, No. 19, pp.220253 as amended by Labour (First Amendment) Act 1998, dated 28 January 1998, Nepal Recorder
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Name of Act

Notice of the Ministry of Labour (on Minimum Wage Rates for agricultural workers), dated 13 January 2000, Nepal Rajapatra, Vol. 49, No. 40 (a) (E), Pousha, 2056 (January 13, 2000), Section (b).

Name of Act

Labour Rules 2050 1993, published in the Nepal Gazette 2050.7.23 (8 November 1993) and by the Nepal Law Commission
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Name of Act

Civil Service Act 2049 (1993), Act No. 2 of the year 2050 (1993), as authenticated and published on 2050.2.4 (17 May 1993) and amended up to Civil Service (Second Amendment) Act, 2064 (2007) 2064.4.23 (August 8, 2007)
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LEGAL DEFINITIONS


Employee/worker

’Employee’ means a person engaged in administrative functions of the enterprise.

’Worker’ means a person employed on the basis of remuneration to work in any building, premises, machinery or any part thereof used for any production process or providing service or any act relating to such work or for any unscheduled works and shall also include any workers working at piece-rate, contract or agreement.
Labour Act 1992 §2(c), (d)
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Employer

The Labour Act variously imposes rights and obligations on managers and proprietors of enterprises.

’Manager’ means a person appointed for performing the functions in the enterprise.

’Proprietor’ means the person having final authority on the activities of the Enterprise and this expression also includes any person appointed as the Chief of any branch or unit of the Enterprise with powers to exercise final responsibility or authority in respect thereof.

’Enterprise’ means any factory, company, organisation, association, firm, or group thereof, established under the prevailing laws for the purpose of operating any industry, profession or service, where ten or more workers or employees are engaged and this expression also includes:
(1) Tea estates, established under the law for commercial purpose;
(2) Enterprise operating within the industrial districts established by the Government of Nepal where less than ten workers or employees are engaged.
Labour Act 1992 §2(b), (e), (f)

Wage

’Remuneration’ means the remuneration or wage to be received in cash or kind from the Enterprise by the worker or employee for the works performed in the Enterprise and this expression also includes any amount to be received in cash or kind for the works done under piece-rate or contract.
Labour Act 1992 §2(r)

MINIMUM WAGE FIXING


Procedure

The Government may fix the minimum remuneration rate on the recommendation of a tripartite committee.
Labour Act 1992 §21(1)

Procedure in general

The Government sets minimum rates of remuneration in accordance with the recommendations of the Minimum Remuneration Fixation Committee and the High Level Monitoring Committee.
Labour Act 1992 Chapter 4
Labour Rules 1993 Chapter 3

Government decides after consultation of the social partners

The Government sets minimum rates of remuneration in accordance with the recommendations of the Minimum Remuneration Fixation Committee.

The Minimum Remuneration Fixation Committee makes a recommendation on minimum wage levels for non-agricultural workers in enterprises (including tea estates). It is composed of an equal number of workers and employers representatives, and representatives of the government. Experts can be consulted by the Minimum Remuneration Fixation Committee regarding the determination of minimum wage rates. If it is not possible to form the Minimum Remuneration Fixation Committee, or if that Committee is unable to make a recommendation, the Government may prescribe the minimum wage rates applicable to workers and employees of enterprises.

The High Level Monitoring Committee makes a recommendation on the minimum wage rates for agricultural workers.
Labour Act 1992 §21 (2), (5)
Notice 1 of the Government of Nepal on the Minimum Wage for Agricultural Labour 2008 Section B

Criteria

The criteria to be considered by the Minimum Remuneration Fixation Committee are set out in §10(b) of the Labour Rules 1993.

Cost of living

In making the minimum wage recommendation, the Minimum Remuneration Fixation Committee is to take account of the current market value and the financial, monetary and social context of the country.
Labour Rules 1993 §10(b)

Economic development

In making the minimum wage recommendation, the Minimum Remuneration Fixation Committee is to take account of the current market value and the financial, monetary and social context of the country.
Labour Rules 1993 §10(b)

Level of employment

In making the minimum wage recommendation, the Minimum Remuneration Fixation Committee is to take account of the current market value and the financial, monetary and social context of the country.
Labour Rules 1993 §10(b)

Capacity of employers to pay

In making the minimum wage recommendation, the Minimum Remuneration Fixation Committee is to take account of the affordability of the enterprise.
Labour Rules 1993 §10(b)

Inflation rate

In making the minimum wage recommendation, the Minimum Remuneration Fixation Committee is to take account of the current market value and the financial, monetary and social context of the country.
Labour Rules 1993 §10(b)

Coverage

The minimum wage rates set in accordance with the Labour Act 1992 and Labour Rules 1993 apply to private sector workers and employees in enterprises of more than 10 workers, and in enterprises operating in industrial districts established by the government.
Labour Act 1992 §2(b), (c) and (d)

Scope

Minimum wage rates are set by the government for all agricultural workers, workers in enterprises (including commercial tea houses) where more than 10 workers or employees are engaged and workers in enterprises operating in industrial districts established by the Government of Nepal.
Labour Act 1992 §§2(b), 21

Excluded categories

Domestic workers, civil servants and workers in enterprises of less than 10 workers (unless operating in government-established industrial districts) are excluded from the coverage of minimum wage provisions.
Labour Act 1992 §§2, 21(1)

» Workers

Domestic workers are not covered by the minimum wage provisions as they are implicitly excluded from the definition of ’worker’ and ’employee’ under the Labour Act. Workers in enterprises of less than 10 workers, other than enterprises operating in industrial districts established by the Government of Nepal, are excluded by virtue of the definition of ’enterprises’.
Labour Act 1992 §2

» Sectors

The public sector is not covered by the minimum wage provisions by virtue of the fact that it is not included within the meaning of ’employee’, ’worker’ or ’enterprise’.
Labour Act 1992 §2
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Specific minimum wage rates

Minimum wage rates distinguish between agricultural workers and workers in enterprises covered by the minimum wage provisions.

» Specific minimum wage by sector

Different minimum wage rates are set for agricultural worker and for workers and employees working in all other enterprises (excluding those relating to tea firms and jute industries). Separate wage provisions will be formed and excecuted for the jute industry, the press and media sector and the carpet and garment industry, although this has not occurred yet.

The minimum salaries for public sector employees are to be set in accordance with the Civil Service Act 1993.
Notice 1 of the Government of Nepal on the Minimum Wage for Agricultural Labour 2008
Notice 2 of the Government of Nepal on the Minimum Wage for workers of all other enterprises §6, 7
Civil Service Act 1993 Chapter 5

» Specific minimum wage by region

Although the legislation stipulates that minimum wage rates may be set on the basis of geographical region, and the minimum wage notice for agricultural workers stipulates that Local Development Committees can fix the local wage rates at no less than the national minimum wage rate, current minimum wage rates have not been set by region.
Labour Act 1992 §21(3)
Notice 1 of the Government of Nepal on the Minimum Wage for Agricultural Labour 2008 §2

» Minimum wage levels for specific categories of workers


» Domestic Workers

Domestic workers are excluded from the minimum wage protections.
Labour Act 1992 §2(d)

» Contractors

Contractors are included in the minimum wage provisions.
Labour Act 1992 §2(d)

» Piece-rate workers

Piece-rate workers are covered by the minimum remuneration provisions.
Labour Act 1992 §2(d), (r)

» Other categories

Specific minimum wage rates are established for unskilled, semi-skilled, skilled and highly skilled workers in enterprises.
Notice 2 of the Government of Nepal on the Minimum Wage for workers of all other enterprises

Level


Minimum wage level(s) in national currency

4,600 rupees per month (unskilled workers in non-agricultural enterprises, excluding tea firms and the jute industry)
Notice 2 of the Government of Nepal on the Minimum Wage for workers of all other enterprises §1
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Last minimum wage update

17 November 2008
Notice 2 of the Government of Nepal on the Minimum Wage for workers of all other enterprises §4

In-kind allowances

The definition of remuneration implicitly permits minimum pay requirements to be fulfilled in the form of payments-in-kind.
Labour Act 1992 §2(r)

Rate of payment

The Proprietor may fix the period of payment of remuneration to the workers or employees on weekly, fortnightly or monthly basis in way not exceeding the period of one month, provided that this provision shall not apply in respect of the persons who are working on daily wages, piece-rate or contract basis.
Labour Act 1992 §23

» Daily

A daily wage rate is set for daily-wage workers in enterprises and for workers in agriculture.
Notice 2 of the Government of Nepal on the Minimum Wage for workers of all other enterprises §2
Notice 1 of the Government of Nepal on the Minimum Wage for Agricultural Labour 2008 §1

» Monthly

Monthly remuneration rates are set for workers and employees in entrprises other than agricultural enterprises (excluding tea firms and jut industries)
Notice 2 of the Government of Nepal on the Minimum Wage for workers of all other enterprises §1

Scheduled frequency of adjustment

Workers and employees appointed permanently pursuant to sub-section 4(2) of the Labour Act 1992 are to receive an increment in remuneration each year equal to the half day’s remuneration of the worker or employee. However, the annual increment may be withheld in relation to workers who commit certain acts of misconduct.
Labour Act 1992 §§21A, 52(2)
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Enforcement mechanisms

Workers in establishments: Labour Officers, appointed by the government, may enter work places in order to determine whether or not minimum remuneration prescribed by the government is being enforced.

Agricultural labourers: District Development Committees, Village Development Committees and Municipalities carry out implementation and monitoring of established minimum wage rates. They shall accept any complaints filed in respect to the wages of agricultural labourers within their respective regions and resolve any problems which arise.
Notice of the Ministry of Labour (on Minimum Wage Rates for agricultural workers) Section a), (6) and (7)
Labour Act 1992 §65 (f)

Labour inspection

In the course of supervising the implementation of the minimum remuneration prescribed by the Government, labour officers may exercise powers of mediation, dispute resolution, arbitration, investigation and corrective action.

The District Development Committee, and the Municipality and Village Development Committe shall monitor and execute the wage rate for agricultural workers.
Labour Rules 1993 §53
Notice 1 of the Government of Nepal on the Minimum Wage for Agricultural Labour 2008 Part (B)

Fines in national currency for non-respect of legislation

An offence under the Labour Act (including failure to pay specified minimum wage rates) can result in a fine of up to 10,000 rupees according to the gravity of the offence. Continued failure to pay the specified rates may be punished with an additional fine of one thousand rupees per day.
Labour Act 1992 §57

Results generated on: 23rd April 2014 at 15:15:48.
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