"29 percent of establishments do not pay minimum wages while 50 percent of workers work over 8 hours a day"

KATHMANDU, MAY 1 : A recent Labour Audit Report published by the General Federation of Nepalese Trade Unions (GEFONT) reveals that 29% of establishments in Nepal fail to pay the legally mandated minimum wage to their workers.

The government had set the minimum monthly wage at Rs 17,300, effective from Shrawan 1, 2080 (mid-July 2023). However, the number of establishments violating this rule has continued to rise annually.

Compared to the previous year-2080 B,S,-the percentage of employers not providing minimum wages increased significantly last year- 2081 B.S. GEFONT’s last year’s report had shown that 21.7% of industries or establishments were not complying with the minimum wage provision.

Wage exploitation rampant among outsourced workers

The report also highlights that 77.2% of companies employing workers through outsourcing firms fail to provide basic entitlements such as minimum wage and overtime pay. This figure has increased from 72.6% in the previous year, indicating that outsourcing companies are emerging as major centers of labour exploitation.

The report criticises the Labour and Employment Offices, which are responsible for conducting labour inspections and enforcing the submission of annual labour audit reports by employers, for their inaction and negligence.

More than 50% of workers work beyond legal hours

According to the audit, over 50% of workers in Nepal are compelled to work more than eight hours a day, in violation of Section 28 of the Labour Act, 2017, which sets the daily working limit at eight hours and the weekly limit at 48 hours.

In the previous year’s audit, 61.1% of establishments were found to be engaging workers beyond the legally allowed working hours (i.e., making them work overtime).

The law also mandates a 30-minute break after five hours of continuous work, but only 14.6% of establishments failed to comply with this requirement in the previous audit. Shockingly, that number has more than doubled last year to 31.6%, indicating a widespread practice of denying workers rest and thereby effectively extending working hours without due compensation.

Decline in Permanent Employment; Rise in Outsourcing

The proportion of workers in permanent employment decreased by 10.67% last year compared to the previous year. According to GEFONT’s labour audit, 59.72% of workers in establishments were in regular employment. However, last year's audit shows this number dropped to 53.35%, pointing to a growing reliance on contractual or outsourced labour.

Other types of employment recorded include functional employment ( 5.51%), time-based employment ( 8.58%), part-time employment ( 1.48%), and casual and other forms of employment ( 2.91%).

Child labour still exists

Although the rate of child labor remains at 0.6%, the number of industries found to be using child labour has doubled last year compared to the previous year. While only one establishment was found employing child labour in the earlier audit, two establishments were found doing so last year, despite the percentage remaining unchanged due to the higher number of audited institutions.