Labour and employment law in Nepal is anchored by the Labour Act 2074 (2017), the Social Security Act 2074, the Bonus Act 2030 and the Trade Union Act, with disputes adjudicated by the Labour Court and on further appeal to the Supreme Court. Alpine Law Associates advises employers, employees, foreign investors and HR teams across the full lifecycle — drafting employment contracts, structuring salary and SSF compliance, handling terminations and disciplinary procedures, defending or initiating Labour Court cases, and representing parties in collective bargaining. Whether you operate a 10-person startup or a 500-employee multinational subsidiary, our labour lawyers in Kathmandu deliver compliant, dispute-tested counsel.
Labour Act 2074 (2017) — Scope & Key Provisions
The Labour Act 2074 governs all employer–employee relationships in Nepal's organised sector, replacing the Labour Act 2048 and modernising employment standards. Probation is capped at 6 months — if not terminated by then, the contract is deemed permanent. Working hours are capped at 8 per day and 48 per week, with mandatory weekly rest. The Act creates statutory rights to paid annual leave, sick leave, festival bonus, and equal pay for equal work. We advise on contract structuring (fixed-term vs permanent vs work-based vs casual), HR policy alignment with the Act, internal grievance procedures, and compliance audits.
Wages, Working Hours & Minimum Wage
Nepal's national minimum wage is set by the Ministry of Labour, Employment and Social Security and revised periodically. As of Shrawan 1, 2082 BS (15 July 2025), the monthly minimum wage is NPR 19,550 (NPR 12,170 basic + NPR 7,380 dearness allowance), with a daily rate of NPR 754 and hourly rates of NPR 101 (full-time) and NPR 107 (part-time). Tea-plantation workers are subject to a separate sectoral minimum. Overtime must be paid at 1.5x the standard wage. We advise employers on wage-structure design, dearness-allowance computation, overtime liability, and audit responses.
Provident Fund, Gratuity & Social Security (SSF)
The Labour Act and the Social Security Act 2074 require employers to deposit retirement contributions into the Social Security Fund (SSF) administered by the Ministry of Labour. Provident Fund: 10% deducted from each worker's basic salary, with a 100% employer match — totalling 20% of basic. Gratuity: 8.33% of basic deposited monthly. SSF total contribution: 11% from employee + 20% from employer = 31% of basic, allocated across old-age pension (17.33%), medical and health (1%), accident and disability (1.4%) and other schemes. Contributions are due by the 15th of each Nepali month and are tax-deductible (up to NPR 500,000 or one-third of employment income, whichever is lower). We advise on SSF registration, monthly remittance compliance, audit defence, and benefit-claim disputes.
Termination, Probation & Disciplinary Action
The Labour Act prescribes specific grounds and procedures for lawful termination — including misconduct, redundancy, and contract expiry. Employers with 10 or more workers must issue at least 7 days' notice for the worker to submit clarifications before termination, and termination decisions must be supported by documented investigation. Wrongful termination exposes employers to reinstatement orders, back-wages, and in some cases, retrenchment compensation. We act for both employers and dismissed employees: drafting compliant termination notices, conducting workplace investigations, defending Labour Court complaints, negotiating severance packages, and litigating reinstatement claims.
Trade Unions & Collective Bargaining
The Trade Union Act recognises workers' right to form, join, and operate trade unions, and the Labour Act 2074 provides the framework for collective bargaining agreements (CBAs) between recognised unions and employers. Industrial action is regulated — notice requirements, ballot procedures, and prohibited activities are codified. We advise both unions and employers on registration, union recognition disputes, CBA negotiation and drafting, strike-action compliance, and dispute settlement under the Act.
Bonus Act 2030 — Profit-Sharing Compliance
Under Section 5 of the Bonus Act 2030, enterprises are required to allocate 10% of annual net profit to employee bonuses. Eligibility extends to employees who have worked for at least half the fiscal year period; casual and shift workers, and employees dismissed for theft, property damage, or illegal strikes are excluded. Bonus computation, individual entitlement, and timing of distribution are prescribed. We advise on bonus-pool computation, eligibility determinations, dispute resolution where employees challenge exclusion, and compliance audits.
Labour Disputes — Mediation, Labour Office, Labour Court & Supreme Court
Nepal's labour dispute resolution flow runs in four stages. First, the parties apply for mediation at the Labour Office; if unresolved, the Labour Office issues a decision within 15 days. Either party may appeal to the Labour Court within 35 days, and the Court is required to dispose of the matter within 90 days. A final appeal lies to the Supreme Court of Nepal under Section 161 of the Labour Act 2074, again within 35 days of the Labour Court decision. Our litigation team handles the full chain — from drafting the initial Labour Office complaint, through Labour Court advocacy and Supreme Court tax-ground appeals.
Who We Serve
Our labour and employment law practice serves a broad range of clients: domestic businesses needing HR compliance frameworks and contract templates, multinational subsidiaries handling FDI-related employment matters and expat work permits, NRN-owned enterprises navigating Nepali labour standards, dismissed or retrenched employees seeking reinstatement or compensation, and trade unions managing recognition disputes and CBA negotiations. We coordinate with HR consultants, payroll providers, and accounting firms to deliver integrated employment-law and SSF-compliance counsel. New engagements receive a free initial consultation.
Last reviewed: April 2026 (FY 2082/83 BS). Minimum wage and SSF rates in Nepal are revised periodically by the Ministry of Labour and the Social Security Fund. We update this page after each revision — but for binding advice on a specific transaction, contact our team for current values and analysis tailored to your facts.