Highlights of the Labour Act 2074: What Employers Must Know
Employment contracts, working hours, termination, and social security: the obligations the Labour Act 2074 places on every employer.
The Labour Act 2074 reshaped the employer-employee relationship in Nepal, replacing older law with a framework that is clearer about contracts, dismissal, and social security. Every employer, large or small, operates under it.
Contracts and categories
The Act expects a written employment relationship and recognises several categories of employment, including regular, work-based, time-bound, and casual. The category determines much of what follows, including notice and benefits, so classifying a role correctly at the outset matters.
Hours, leave, and pay
Standard working hours, overtime, weekly rest, and statutory leave are all defined. So is the structure of remuneration. Getting these into the contract and the payroll from day one avoids disputes that otherwise surface at termination.
Termination and social security
The Act sets out the lawful grounds and procedure for ending employment, and links to the Social Security Fund for contributions. A termination that skips the prescribed process is the single most common source of labour disputes; following the procedure protects the employer as much as the employee.
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