Nepal (NP)
Nepal is a landlocked Himalayan nation between India and China, home to eight of the world's ten highest peaks including Mount Everest (8,849m).
Employment Rights
Sick leave, dismissal protection and red flags in Nepal.
Nepal employment law is governed by the Labour Act 2074 (2017), the Labour Rules 2075 (2018), and the Social Security Act 2074 (2017), enforced by the Department of Labour and Occupational Safety (DOLOS) and adjudicated by Labour Offices and the Labour Court. The minimum wage, working hours, leave entitlements, and termination procedures are all set by statute. Foreign nationals require a work permit issued by the Department of Labour and Occupational Safety. The Social Security Fund (SSF) covers registered contributors for medical, accident, maternity, retirement and dependent benefits.
Sick leave
Rules: Employees are entitled to 12 days of paid sick leave per calendar year under Section 44 of the Labour Act 2074. Sick leave accumulates up to a maximum of 45 days; days exceeding 45 must be encashed annually at the basic salary rate. For sick leave exceeding 3 consecutive days, the employee must submit a medical certificate from a recognised doctor.
Doctor note: Day 4 — a medical certificate from a recognised doctor is required for sick leave exceeding 3 consecutive days.
Employer pay: Full basic salary for up to 12 days of statutory sick leave per year; the employer pays directly. Beyond the 12-day statutory minimum, the employee may draw from accumulated sick leave (up to the 45-day cap). No government sickness cash benefit applies in the short-term for most workers.
Long-term: SSF (Social Security Fund) contributors may be eligible for medical and sickness benefits under the Social Security Act 2074, depending on contribution history and employment registration. Long-term disability benefits also exist within the SSF framework. Expats should confirm SSF registration status with their employer on day one.
Dismissal protection
Law: The Labour Act 2074 (Sections 48–52) governs termination, retrenchment, and dismissal. Misconduct dismissal requires a 7-day show-cause notice and opportunity to respond before action. Unjustified dismissal entitles the worker to compensation of up to 3 months' salary plus statutory gratuity. The Labour Office and Labour Court have jurisdiction over disputes.
Deadline to sue: A dismissed worker must file a complaint at the local Labour Office within 45 days of the termination date. If the Labour Office conciliation process fails, the employee has a further 35 days from the Labour Office decision to file a formal case in the Labour Court. Total window: approximately 80 days from dismissal — do not delay filing the initial Labour Office complaint.
Probation
The probation period under the Labour Act 2074 is 6 months. During probation employment may be terminated if work performance is unsatisfactory. Notice during probation is employer-contract driven but generally shorter. After confirmation: statutory notice to terminate is 1 day (service up to 4 weeks), 7 days (4 weeks to 1 year), or 30 days (more than 1 year). Payment in lieu of notice is permitted.
Notice periods
Employer notice to terminate permanent workers: 30 days for employees with more than 1 year of service; 7 days for 4 weeks to 1 year; 1 day for up to 4 weeks. Employee resignation follows the same schedule. Misconduct dismissal may be without notice following the required show-cause process. Gratuity (one month basic salary per year of service after 1 year) is payable on separation.
Working time
Max hours: Standard working hours are 8 hours per day and 48 hours per week (Labour Act 2074, Section 28). A 30-minute rest break is required after 5 consecutive hours of work. The maximum working time including overtime is 72 hours per week.
Min rest: Minimum weekly rest is normally Saturday (or one day per 7-day period in agreement with the employer). Employees must receive 11 consecutive hours of rest between shifts. Additional rest breaks apply for shift and hazardous work.
Overtime: Overtime must be compensated at 1.5× the ordinary wage rate. Maximum overtime is 4 hours per day and 24 hours per week. Overtime must be voluntary; employers cannot force overtime without employee agreement. Employees under 18 cannot work overtime.
Vacation
Home leave (annual leave equivalent): employees earn 1 day of paid home leave for every 20 working days, equating to approximately 18 days per year for a full-year worker. Leave accumulates up to a maximum of 90 days; once the 90-day cap is reached, excess must be encashed at the basic salary rate. Casual leave of 12 days and sick leave of 12 days per year are provided separately. Public holidays (gazetted national and religious holidays) are additional and numbered in the official gazette each year.
Anti-discrimination
The Labour Act 2074 and the Constitution of Nepal 2015 prohibit discrimination in employment on grounds of race, ethnicity, religion, gender, disability, pregnancy, and social origin. Workplace sexual harassment is prohibited and must be addressed through employer-established committees. Enforcement is through the Labour Office, Labour Court, and, for fundamental rights, the constitutional courts. No separate dedicated equality commission exists; complaints go through the labour administration system.
Contract red flags
- !Working on a tourist visa — tourist visas do not permit employment in Nepal; any employer suggesting this arrangement exposes you to deportation and the employer to penalties.
- !Salary below NPR 19,550 per month (effective 1 Shrawan 2082 / 17 July 2025) — verify the current minimum wage at dol.gov.np before accepting.
- !No SSF (Social Security Fund) registration or PAN/TDS clarity — employer non-registration for SSF is a compliance breach and can affect your benefits entitlements.
- !Passport retention by employer — illegal; employers may not retain an employee's travel document.
- !Cash-only salary with no payslip — creates tax, SSF and termination-benefit disputes; always request written payslips.
- !No termination or notice clause in the contract — without written terms the statutory minimums apply, which may be less favourable.
- !Unpaid trial or evaluation work — any work performed must be compensated from Day 1; unpaid trials violate the Labour Act.
Employment Rights
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