Nepal

Employment Contracts

Employment contracts in Nepal are an agreement between an employer and employee for labor, which includes the terms and conditions of employment and the letter of appointment. Employment contracts must be in writing. However, a written contract is not required for casual employment.

Employers are required to hire Nepal citizens if possible and may only hire a foreign employee if a Nepal citizen cannot be found. When entering into an employment contract with a foreigner, the contract must be in a language understood by the employee or English.

Public Holidays

• Democracy Day
• Maha Shivaratri
• Holi Holiday
• Nepali New Year
• International Workers Day
• Rakshya Bandhan
• Teej Holiday
• Dashain holidays
• Tihar Festival

Optional holidays

• Nari Dibas
• Ramjan Edul Fikra
• Edyul Aajaha
• Jitiya
• Christmas Day

Compensation

Employees in Nepal are entitled to a profit bonus. Nepal also has a minimum wage.

Working Hours

The standard work period in Nepal is 48 hours or eight hours a day over six days. Employees are entitled to a half hour of rest after five hours of work. Overtime is paid at one and a half times the employee’s normal wages. Overtime is limited to four hours a day and at 24 hours a week.

Employers must provide female employees working between sunset and sunrise with transportation to and from work.

Vacation Leave

Employees receive one day of paid annual leave for every 20 worked days worked.

Sick Leave

Employees receive 12 days of fully paid sick leave after a year of service and 13 days of bereavement leave. Employees can accumulate up to 45 days of sick leave. Employers must pay employees for any unused sick leave exceeding the 45 days at the end of each year. Any accrued or accumulated sick leave that is not used when an employee separates from service must be paid by the employer.

Maternity / Paternity Leave

Female employees are entitled to 60 days of paid maternity leave. Additionally, female employees can request an additional 38 days of unpaid maternity leave. Male employees are entitled to 15 days of paid paternity leave.

Employment Termination/Severance

An employment contract can be terminated at the end of the contract period (if for a fixed term), upon completion of the work (if work-based), by the employee and by the employer. Employers must have a valid reason for dismissing an employee.

The law says that an employer may terminate the employee based on poor performance. However, the employee should be provided an opportunity to submit explanation giving at least seven days by the employer.

If the employee has declared disabled by the medical practitioner, then the employer may terminate the employment based on ill health. However, if the worker suffers injury due to accident in the workplace and undergoing the treatment, the employment cannot be terminated for one year. The employment of a worker undergoing the treatment cannot be terminated until six months unless certified by a medical practitioner.

An employee can terminate the employment voluntarily by submitting a written resignation letter. The employer must approve the resignation within 15 days. If the employer fails to accept the resignation within the 15 days, it will be deemed accepted. The resignation can be cancelled by mutual consent or if the employee continues working after the last day.

Both employers and employees are required to provide notice of termination or resignation, except for dismissals for misconduct. The notice requirement is linked to the length of service.

Health Insurance Benefits

Nepal is moving towards a universal healthcare system.