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Nepal - Compensation & Benefit Legislation

CAPITAL

Kathmandu

 

CLIMATE

Nepal’s climate varies from cool summers and severe winters in the north to subtropical summers and mild winters in the south.

 

LANGUAGES

Nepali (official; spoken by 90% of the population), about a dozen other languages and about 30 major dialects. Special Note - many in government and business also speak English.

 

LEGAL SYSTEM

Nepal’s legal system is based on Hindu legal concepts and English common law. Nepal has not accepted compulsory ICJ jurisdiction.

 

CURRENCY

Nepalese Rupee (1 USD = 80.89800 NPR as of March 15, 2002).

 

NEPAL - COST-OF-LIVING

ERI's Relocation Assessor is a recommended source for cost-of-living data.

 

NEPAL - EMBASSY/CONSULATES

U.S. Embassy at Kathmandu

Panipokhari

Kathmandu, Nepal

Telephone: [977] (1) 411-179

Fax: [977] (1) 419-963

http://www.south-asia.com/USA/

 

Embassy of Nepal at Washington D.C.

2131 Leroy Place N.W.

Washington D.C. 20008

Telephone: (202) 667-4550

Fax: (202) 667-5534

E-mail: info@nepalembassyusa.org

http://www.nepalembassyusa.org

 

NEPAL - HOLIDAYS

 

NEPAL - MINIMUM AGE

The Constitution stipulates that children shall not be employed in factories, mines, or similar hazardous work and limits children between the ages of 14 and 16 years to a 36-hour workweek. The law establishes a minimum age for employment of minors at 16 years in industry and 14 years in agriculture and mandates acceptable working conditions for children.

 

(Section 6.d. Acceptable Conditions of Work, Nepal – Report of Human Rights Practices, 2001, U.S. Department of State.)

 

NEPAL - MINIMUM REMUNERATION

In April 2000 the Government passed legislation that raised the minimum monthly wage for unskilled labor to NPR 1,450 (approximately $20). The law also defined monthly minimum wages for semi-skilled labor at NPR 1,500 (approximately $21), skilled labor at NPR 1,610 (approximately $22), and highly skilled labor at NPR 1,800 (approximately $20).

 

The minimum wage for children ages 14 to 16 was set at RPN 1,144 (approximately $16). Wages in the unorganized service sector and in agriculture often are as much as 50 percent lower.

 

(Section 6.e. Acceptable Conditions of Work, Nepal – Report of Human Rights Practices, 2001, U.S. Department of State.)

 

NEPAL - REMUNERATION

ERI's Geographic and Salary Assessors are recommended sources for international remuneration covering 189 countries.

 

NEPAL - REPORT OF HUMAN RIGHTS PRACTICES (2001, U.S. DEPARTMENT OF STATE)

Section 6 Worker Rights

 

a. The Right of Association

 

The Constitution provides for the freedom to establish and to join unions and associations. It permits the restriction of unions only in cases of subversion, sedition, or similar conditions. Trade unions have developed administrative structures to organize workers, to bargain collectively, and to conduct worker education programs. The three largest trade unions are affiliated with political parties.

 

Union participation in the formal sector accounts for approximately 10 to 12 percent of the formal work force. The Labor Act and the Trade Union Act, formulated enabling regulations; however, the Government has not yet fully implemented these acts. The Trade Union Act defines procedures for establishing trade unions, associations, and federations. It also protects unions and officials from lawsuits arising from actions taken in the discharge of union duties, including collective bargaining, and prohibits employers from discriminating against trade union members or organizers. There have been few reports of discrimination against union members.

 

The law permits strikes, except by employees in essential services such as water supply, electricity, and telecommunications. The law empowers the Government to halt a strike or to suspend a union's activities if the union disturbs the peace or if it adversely affects the nation's economic interests. Under the Labor Act, 60 percent of a union's membership must vote in favor of a strike in a secret ballot for the strike to be legal. On March 15 the Government averted a strike threatened by hotel employees by determining that hotel employees fall under the Essential Services Act that proscribes strikes. Contract employees at a foreign-owned factory in Hetauda district struck from August 26 to 28 after management refused to hire them as permanent employees. Strike organizers suspended the strike after 3 days. Throughout the year there were frequent reports of Maoist-affiliated agitators disrupting work at garment and carpet factories in the Kathmandu Valley. Some factory owners reported receiving demands from the Maoists that included tripling wages for unskilled laborers; hiring all seasonal or contract employees as permanent labor; and firing any foreign workers. On August 13, Maoist labor organizers stopped work at four Kathmandu Valley garment factories for several hours, shut off the electricity, and forced employees outside to listen to speeches.

 

The Government does not restrict unions from joining

 

international labor bodies. Several trade federations and union organizations maintain a variety of international affiliations.

 

b. The Right to Organize and Bargain Collectively

 

The Labor Act provides for collective bargaining, although the organizational structures to implement the act's provisions have not been established. Collective bargaining agreements cover an estimated 20 percent of wage earners in the organized sector, and hotel workers have bargained aggressively for additional compensation. However, in general, labor remains widely unable to use collective bargaining effectively due to inexperience and employer reluctance to bargain.

 

There are no export processing zones.

 

c. Prohibition of Forced or Compulsory Labor

 

The Constitution prohibits slavery, serfdom, forced labor, or trafficking in persons in any form; however, forced labor and trafficking in persons remain problems (see Section 6.f.). The Department of Labor enforces laws against forced labor in the small formal sector, but remains unable to enforce the law outside that sector. On September 13, Parliament ratified International Labor Organization (ILO) Convention 29 on Forced or Compulsory Labor.

 

Historically, a system of bonded agricultural laborers, known as the Kamaiyas, existed in areas of the western Terai region. In July 2000, the Government made illegal bonded labor and released the "Kamaiya" bonded agricultural workers from their debts. Resettlement of the Kamaiyas began on January 18, and distribution of land began in March. To date, approximately 1,000 heads of household have been provided with up to .335 acres of land and 75 cubic feet of timber to build houses. The Government has set up temporary camps for Kamaiyas still awaiting settlement and has begun arrangements for distribution of food under a food-for-work program. Large numbers of women still are forced to work against their will as prostitutes (see Section 6.f.).

 

d. Status of Child Labor Practices and Minimum Age for Employment

 

The Constitution stipulates that children shall not be employed in factories, mines, or similar hazardous work and limits children between the ages of 14 and 16 years to a 36-hour workweek. The law establishes a minimum age for employment of minors at 16 years in industry and 14 years in agriculture and mandates acceptable working conditions for children.

 

On September 13, Parliament ratified ILO Convention 182 on the elimination of the worst forms of child labor. In July 2000 the Government passed the Child Labor Act, the country's first comprehensive child labor law. The law, drafted with the assistance of the ILO, is the first national legislation to establish specific penalties for those who unlawfully employ children. It repeats the existing prohibition of the employment of children under the age of 14 years and renews the constitutional provision that children between the ages of 14 and 16 years may work, but no more than 6 hours a day and 6 days a week. The law prohibits child labor in tourism, cigarette or carpet factories, mines, or laboratories. Employers must maintain records of all 14-to 16-year-old laborers. However, because the necessary implementing regulations to accompany the law have not yet been passed, implementation is difficult. On September 6, the Supreme Court, acting on a petition filed by an NGO, ordered several government ministries to explain the lack of progress on implementing regulations for the Child Labor Act.

 

These legal protections notwithstanding, resources devoted to their enforcement are limited, and children work in many sectors of the economy. NGO's estimate that 2.6 million children--most of them girls--are economically active. Of that number, 1.7 million children work full time. The agricultural sector accounts for most child laborers--an estimated 95 percent. According to a 1996 ILO study, most working children in the country are girls. Roughly 60 percent of children who work also attend school. Approximately 70 to 75 percent of boys who work go to school, compared with 50 to 60 percent of girls who work. Others are economically active in a few small-scale and cottage industries, such as ragpicking, brick and tile works, quarries, coal mines, match factories and auto repair shops. In previous years there were reports that children also were economically active in the carpet weaving, pottery, basket weaving, sewing, and ironsmithing industries. A small number of children are employed in bars and restaurants and as domestics and porters.

 

There are reports that the Maoists use children, including girls, as soldiers, shields, runners, and messengers.

 

The Ministry of Labor's enforcement record is mixed. According to the Ministry, during the year it conducted several hundred inspections of carpet factories in the Kathmandu Valley to ensure that no child labor was present. The Ministry, with the help of the ILO, has set up 12 daycare centers in 6 districts for children of carpet weavers, who might otherwise join their parents at the loom. The Government also conducts public awareness programs to raise public sensitivity to the problem of child labor.

 

The private sector has made its own efforts to eradicate child labor, especially in the carpet industry. In August 1999 the carpet manufacturers association pledged publicly to end child labor in the industry by 2005. The Rugmark Foundation certifies carpets made without child labor; over half of all carpet factories participate in this or a similar certification system. As a result of this initiative, and of consumer pressure, Rugmark estimates that children constitute only 2 percent of the work force in the export-oriented carpet industry. However, children's rights activists still state that children remain a part of the work force, in the smaller factories.

 

Trafficking in girls continues to be a serious problem(see Section 6.f.).

 

e. Acceptable Conditions of Work

 

In April 2000 the Government passed legislation that raised the minimum monthly wage for unskilled labor to $20 (Rs. 1,450). The law also defined monthly minimum wages for semi-skilled labor at approximately $21 (Rs. 1,500), skilled labor at $22 (Rs. 1,610), and highly skilled labor at $25 (Rs. 1,800). The minimum wage for children ages 14 to 16 was set at $16 (Rs. 1,144). Wages in the unorganized service sector and in agriculture often are as much as 50 percent lower. The Labor Act calls for a 48-hour workweek, with 1 day off per week, and limits overtime to 20 hours per week.

 

Health and safety standards and other benefits such as a provident fund and maternity benefits also are established in the act. Implementation of the new Labor Act has been slow, as the Government has not created the necessary regulatory or administrative structures to enforce its provisions. Workers do not have the right to remove themselves from dangerous work situations without fear of losing their jobs. Although the law authorizes labor officers to order employers to rectify unsafe conditions, enforcement of safety standards remains minimal.

 

f. Trafficking in Persons

 

The law prohibits trafficking in persons and prescribes imprisonment of up to 20 years for infractions; however, trafficking in women and girls remains a serious problem in several of the country's poorest areas, and borderguards commonly accept bribes from traffickers. The Government protects the rights of victims and does not detain, jail, or prosecute them for violations of other laws. Young women are by far the most common targets; trafficking of boys has been reported in rare instances. While the vast majority of trafficking is of women and girls for sexual exploitation, women and girls sometimes are trafficked for domestic service, manual or semi-skilled bonded labor, or other purposes. The country is a primary source country for the South Asia region; most women and girls trafficked from the country go to India. Local NGO's combating trafficking estimate that from 5,000 to 12,000 Nepali women and girls are lured or abducted annually into India and subsequently forced into prostitution; however, these numbers are not consistent and NGO's are seeking better estimates. Citizens reportedly also have been trafficked to Hong Kong, Saudi Arabia, and other countries in the Middle East. In some cases, parents or relatives sell women and young girls into sexual slavery. Hundreds of girls and women return to the country annually after having worked as prostitutes in India. Most are destitute and, according to some estimates, 50 percent are HIV-positive when they return. There is legislation to protect women from coercive trafficking, including a ban on female domestic labor leaving the country to work in Saudi Arabia and other countries in the Gulf; however, enforcement is not strict and penalties are modest (see Section 2.d.). Women's rights groups have protested the ban as discriminatory: Government officials suspect that organized crime groups and "marriage brokers" are the primary perpetrators of trafficking in the country. The traffickers usually are from the country, but have links to brothels in India. NGO's report that approximately 50 percent of the victims are lured to India with the promise of good jobs and marriage, 40 percent are sold by a family member and 10 percent are kidnapped. These estimates have not been verified. NGO's have found that once prevention programs are instigated in a district, the traffickers move to other areas.

 

NEPAL - SOCIAL SECURITY

Social Security Office of International Programs:

 

http://www.ssa.gov/SSA_Home.html

 

NEPAL - STANDARD WORKWEEK

The Labor Act calls for a 48-hour workweek, with 1 day off per week, and limits overtime to 20 hours per week.

 

(Section 6.e. Acceptable Conditions of Work, Nepal – Report of Human Rights Practices, 2001, U.S. Department of State.)