What Is Minimum Salary?
Minimum salary is the lowest legal wages or salaries to be paid by an employer to their employee as a compensation to their work. It ensures that employees can meet their basic standards of living, such as food, shelter, clothing, and healthcare.
Why Is Minimum Salary Important in Nepal?
Minimum salary policies help to reduce poverty, prevent worker exploitation, and support economic equality. In Nepal, where a large portion of the population depends on daily wages, fair salary regulation is vital for national development. This helps to reduce the gap between the rich and poor class of people maintaining equity in pay for their labour.
Proposed Minimum Salary in Nepal
Government-Declared Minimum Wage (Latest Update)
The Government of Nepal has revised the minimum monthly salary to NPR 19,550 and the daily wage at NPR 754 from the committee where the Government of Nepal, Employer and Employee union representatives are its members. This includes basic salary of NPR 12,170 and dearness allowance of NPR 7,380. This will be effective upon publication in the Nepal Gadgette from Shrawan 1 2082.
Minimum Salary for Different Sectors
The same minimum wage applies to both skilled and unskilled labor across formal employment sectors, including factories, offices, and industrial setups of Nepal. However, informal sectors often lack compliance, leading to wage disparities.
Allowances Included in Minimum Wage
The government-mandated minimum salary includes:
- Basic wage
- Dearness allowance
- Other benefits such as festival allowances (if applicable under Labor Act)
Minimum Salary Trend in Nepal Over the Years
Historical Comparison of Minimum Salary
The minimum salary per month of employee in the past years are as follows:
2070 : NPR 8,000
2074 : NPR 13,450
2080: NPR 17,300
There has been steady growth in minimum salary, reflecting cost-of-living increases and inflation adjustments.
Key Changes in Minimum Wage Policy
The government has aimed to align minimum pay with inflation and basic living costs during increment of salary every time. The latest change emphasizes a push toward dignified living conditions.
Minimum Salary for Various Occupations in Nepal
Factory and Industrial Workers
Industrial workers are the primary focus of minimum wage laws. Employers must strictly comply to government-prescribed rates.
Agricultural Laborers
Implementation of labor act in agriculture is weak in Nepal. Many workers still earn less than the minimum wage, especially in rural areas.
Domestic Workers and Helpers
Domestic workers are also entitled to minimum wages. However, monitoring and enforcement remain a challenge in private homes.
Security Personnel and Hotel Workers
In sectors like security and hospitality, many employees are contractual. It is crucial for manpower agencies and employers to comply with wage guidelines.
Legal Provisions on Minimum Salary in Nepal
Labor Act 2074 and Wage Regulations
The Labor Act 2074 and Labor Rules 2075 outline the framework for determining and revising the minimum salary. The Ministry of Labor, Employment and Social Security reviews it periodically.
Rights of Employees Regarding Minimum Wage
Employees have the right to:
- Receive at least the minimum wage
- Report violations anonymously
- Access legal support from trade unions
Penalties for Non-Compliance
Non-compliance with minimum salary laws can lead to:
- Fines up to NPR 100,000
- Suspension of business license
- Legal action under labor tribunal
The government of Nepal is in a mission to check the compliance of minimum salary through labour audit in Nepal.
Living Wage vs Minimum Wage in Nepal
Despite increases, Nepal's minimum wage still falls short of a true “living wage”, particularly in urban areas like Kathmandu, where rent and transportation are high.
Key Challenges and Issues Regarding Minimum Salary
Enforcement Problems
Inadequate monitoring means many employers underpay, especially in informal or remote sectors.
Inflation and Cost of Living
Rising inflation dilutes the real value of wages. Workers earning the minimum often struggle to cover basic expenses.
Informal Sector and Wage Gaps
Over 60% of Nepal’s labor force works in the informal economy, where wage laws are rarely enforced.
Future Outlook for Minimum Salary in Nepal
Expected Revisions in Coming Years
There is growing pressure from labor unions to revise the minimum salary annually. A rise to NPR 25,000/month by 2084 is being discussed.
Role of Trade Unions and Labor Advocacy Groups
Labor organizations like GEFONT and NTUC are actively lobbying for better enforcement and realistic wage settings aligned with the living index.
Bottom Line
While the government of Nepal has made notable progress in raising the minimum salary, challenges remain in enforcement and alignment with the cost of living. Stronger monitoring and support for workers in the informal economy will be key to achieving true wage justice.