How to Draft Employee Rules and Regulations in Nepal?

If you own a small or large business in Nepal, you should set up rules and regulations for your employees. How do we develop employee rules and regulations?

This article specifies what should be included in rules and regulations. Our law has long made mandatory clauses for both large and small businesses in Nepal.

The Nepali government has issued guidelines for workplace, vacation bonus. Other employee benefits are also developed under Nepal’s Labor Act 2017, Labor Regulation 2018, and Bonus Act 1973. Every employee in the organization is required to follow the organization’s Conduct and Discipline Rules.

A private company is an association of individuals formed for specific purposes.

The rules for private companies vary depending on the establishment. Any employee who violates these rules and regulations will face disciplinary action. A private company can impose set rules regarding holidays and employee login and log-out time, sick leaves during working hours and details of lunch and free time, system management, and it also mentions the penalties in case of misconduct.

Employee private limited company rules and regulations cover unpaid and paid leave, as well as employee provident funds.

Organizations and employees must follow these rules and regulations in order to conduct business and maintain a dynamic work environment.

The following is a comprehensive list of all the aspects of private employment covered.

Form of employment

According to Section 10 of the Labor Act of 2017, there are five types of jobs in Nepal. First and foremost, there is a regular job. A regular job is one that is part-time or long-term. When you sign an employment contract, you must specify the type of job. The following types of jobs are available in Nepal.

  1. Regular Employment
  2. Specified Task
  3. Time specified job
  4. Emergency Position
  5. Part Time Position (Work)

Regular Employment

It refers to any type of office work that is performed on a regular basis after being appointed to a position.

Specified Task

This implies that the employer assigned or assigned a specific task or service to be completed.

Time Specified Job (Time Bound)

A “time specified job” is employment given or provided to a worker by an employer for a specific period of time in order to provide a service or complete work within that period.

Emergency Position

It refers to a last-minute (emergency) job that is required.

“Emergency employment” refers to work provided by the employer for a period of seven days or less.

Part Time Position (Work)

It includes a part-time job. It means to create employment.
When a private company establishes employee rules and regulations, they should specify the type of employment and service facilities that will be available in their company.

Employment contract

When an employee joins a company, they are entitled to an employment agreement under Section 11 of the Labor Act 2017. When entering into an employment contract, the employee’s rules and regulations should be followed. When making an employment contract, according to Rule 4 of the Labor Regulation 2018, the type of employment, the employee’s job and position, the place of the employment contract, the time and the time when the contract comes into effect should be mentioned.

Such document should clearly state the designation and working hours. The purpose of the agreement is to get the employer and employee on the same page and spell out the terms of employment before work starts.

It is the employee’s right to know exactly what he or she is getting into before accepting a job. When starting a new job, it is critical to secure an employment agreement and ensure that it is not one-sided.

Fundamental Rights

According to Labor Regulation 2018 Rule 44 Factories, every employee, regardless of where they work, is entitled to a set of basic rights relating to health and safety at work as part of a good working environment.

If the workplace is dangerous, such as a construction or mining site, proper safety equipment must be provided.

Employees’ basic rights include cleanliness, drinking water, waste disposal, restrooms, ventilation, and lighting. Factories have developed their own regulations, and it is mandatory for them to take care of health-related issues.

When developing rules and regulations for employees, fundamental rights must be protected in accordance with labor law and labor regulations.

Probationary rights

The probationary period is specified in Section 13 of the Labor Act of 2017. When an employer enters into an employment contract with a worker, he can make him stay for a six-month trial period, and if the worker’s work is not satisfactory during the trial period, he can terminate the employment contract. As such, an employment contract after the unexpired worker’s probationary period expires, the employment relationship will be considered automatically confirmed.

While an employee is on probation, the employer has the right to terminate their employment for unsatisfactory work or unsuitability for the position with advance notice.
If the reason for termination is not unsatisfactory work, the employee may request an investigation.

Workplace Sexual Harassment of Women

Section 132 of the 2017 Labor Act. It has been agreed that sexual abuse will not occur. Under undue influence in the workplace or in the course of work, no one shall do or cause any act that is considered sexual harassment under the law.

If the employer or the establishment’s executive head commits sexual harassment, the union, the victim, or any member of his family may file a complaint under the law. This protection is provided by the Sexual Harassment of Women at Workplace Act.

The minimum wage

Section 34 of the Labour Act of 2017 states wages and benefits will be paid to all employees beginning on the first day of work. Government-mandated minimum wages must be paid.

Each employee in Nepal is entitled to a minimum wage, which enables them to maintain their standard of living and access necessary amenities. Any wage less than the minimum wage is illegal. The Nepali government has set a minimum monthly salary of Rs 15,000 for employees.

The notice was issued on behalf of the Nepal Government, the Ministry of Labour, Employment, and Social Security on 3rd May 2021, stating that the minimum wage for workers will be increased by more than 11% with effect from 1st Shrawan, 2078, i.e. 16th July.

Any organization must now pay the Nepalese government’s minimum wage.


The Bonus Act of 1974 established arrangements for Bonus in Nepal. Bonus Act of 1974, Section 5. Profit: A profitable company should give out bonuses. Every profitable business must pay a bonus to its employees equal to ten percent of its net profit for the fiscal year.

The employee has agreed with the employer to be paid a bonus based on his or her productivity.


Each company’s leave policy must be legally compliant.

 Sick leave, maternity leave, and work leave are all examples of casual leave.

Casual leave is reserved for unforeseen circumstances in which an employee must attend to urgent matters. Employees are permitted to take six days of sick leave per year.

Employees on sick leave will receive their full salary allowance. If a female employee is pregnant, she will be granted maternity leave for a total of sixty days before or after delivery and up to two times during her tenure at the office. Female employees on maternity leave will receive their full salary allowance.

Funeral Leave

If any employee is required to take a leave of absence due to their customs and religion, or if any employee’s father, mother, husband or wife, son, daughter, or female employees’ mother-in-law or father-in-law dies, they will be granted up to fifteen days leave. Employees on active leave will be paid their full salary.

Social Security Fund / Provident Fund

The Nepalese government has set up a social security fund, similar to a pension, to encourage workers and self-employed people to join the social security scheme.

The provident fund is a long-term savings and retirement plan. The social security fund manages the provident fund for all salaried employees in Nepal. When a company creates rules and regulations, it should specify whether or not the money will go to the social security fund.

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