Nepal Sets Pay Floors and Mandatory Social Security for Public Procurement Workers

Government contracts will carry new obligations to workers

Nepal has approved rules setting minimum pay and mandatory social security for workers employed through public procurement, with construction and field workers assigned daily packages ranging from NPR 1,740 to NPR 2,400. At the lowest level, NPR 1,450 goes into the worker's bank account and NPR 290 goes toward social security.

The Procedure on Remuneration and Social Security of Workers Associated with Public Procurement, 2083 covers government construction, consultancy, information technology, factories and other businesses supplying public contracts. Permanent employees, temporary workers, seasonal workers and people hired for only a short period are included. Workers paid by the day must enter the social security system from their first day of work.

Law, Justice and Parliamentary Affairs Minister Sovita Gautam said the procedure is intended to protect wages, prevent exploitation by intermediaries and make employers responsible for workplace safety. Employers that fail to register their workers with the Social Security Fund face exclusion from public procurement.

Public procurement means the goods, construction and services that government bodies buy. The procedure connects access to that business with obligations to the people doing the work: documented employment, wages paid through banks, regular social security contributions and a formal complaints process.

The government's implementation announcement says the requirements apply to new contracts after the procedure is issued. Descriptions vary between contracts invited after issuance and contracts awarded after issuance, leaving the precise treatment of tenders already under way unclear. The announcement also places the public body's contribution inside project budgets, making worker protection part of the price of government purchasing.

What construction and field workers will receive

Construction and field workers fall into five categories based on their work and skills. Each daily package combines a payment to the worker with two social security contributions, one from the public body and one from the employer.

• Category 1, basic support workers such as cleaners and office helpers: NPR 1,740 in total, comprising NPR 1,450 paid to the worker and contributions of NPR 145 each from the public body and employer.
• Category 2, basic workers including guards, light vehicle drivers and general labourers: NPR 1,920 in total, comprising NPR 1,600 paid to the worker and two contributions of NPR 160.
• Category 3, workers with some training and service workers, including assistant tradespeople or operators: NPR 2,100 in total, comprising NPR 1,750 paid to the worker and two contributions of NPR 175.
• Category 4, skilled tradespeople and assistant supervisors, including masons, plumbers and machine or computer operators: NPR 2,280 in total, comprising NPR 1,900 paid to the worker and two contributions of NPR 190.
• Category 5, highly skilled workers and supervisors, including foremen, heavy equipment operators and subengineers: NPR 2,400 in total, comprising NPR 2,000 paid to the worker and two contributions of NPR 200.

The difference between the lowest and highest daily bank payments is NPR 550, or about 38% of the lowest rate. The corresponding total packages differ by NPR 660. Both comparisons use the procedure's five categories, rather than a comparison with earlier wages, for which no previous rate is specified.

How the social security contribution works

Construction and consultancy employers would ordinarily bear the 20% contribution described in the procedure. Under the new arrangement, the public body finances 10% of the wage base and the employer finances another 10%. Each therefore pays half of the specified contribution.

A skilled worker receiving NPR 2,000 a day illustrates the calculation: NPR 200 comes from the government and NPR 200 from the employer, creating a package worth NPR 2,400. The worker receives NPR 2,000 as wages, while NPR 400 is allocated to social security.

Social security contributions go into a protection system rather than the worker's everyday spending account. Keeping the wage and contribution figures separate matters for household budgeting: the total package describes both immediate pay and money committed to social protection.

Public bodies must include their contribution in project cost estimates and rate analyses. A cost estimate sets the expected budget before procurement; a rate analysis calculates the cost of particular work, including labour. Putting the contribution into both documents gives contracting authorities a way to budget for it before bids are submitted.

Professional pay rises with skills and experience

Administrative, technical and specialist workers have a separate schedule with six categories. The monthly totals combine the listed daily wage and the two social security contributions across 26 days, a relationship that can be calculated directly from the figures.

• Basic administrative workers: a daily wage of NPR 1,750, contributions of NPR 175 from each side and a total monthly package of NPR 54,600.
• Basic technical workers: a daily wage of NPR 2,450, contributions of NPR 245 from each side and a total monthly package of NPR 76,440.
• Specialists with up to five years of experience: a daily wage of NPR 3,850, contributions of NPR 385 from each side and a total monthly package of NPR 120,120.
• Specialist experts with five to 10 years of experience: a daily wage of NPR 5,250, contributions of NPR 525 from each side and a total monthly package of NPR 163,800.
• Specialist team leaders with 10 to 15 years of experience: a daily wage of NPR 6,650, contributions of NPR 665 from each side and a total monthly package of NPR 207,480.
• Specialist team leaders with more than 15 years of experience: a daily wage of NPR 8,400, contributions of NPR 840 from each side and a total monthly package of NPR 262,080.

For an administrative worker, the calculation is NPR 2,100 a day including contributions, multiplied by 26, giving NPR 54,600. For the most experienced team leader, NPR 10,080 multiplied by 26 gives NPR 262,080. These totals help public bodies compare the full labour cost of different professional roles.

Factory and supplier schedules need careful checking

Workers employed by industries, factories, vendors and producers connected to public procurement have a separate monthly schedule. The detailed breakdown describes a total package that includes a social security contribution of 20%, alongside additional festival expenses, leave and allowances required under prevailing law.

• Category 1: NPR 32,607 in total, including NPR 27,172 paid to the worker and NPR 5,435 for social security.
• Category 2: NPR 38,448 in the detailed schedule, with a wage of NPR 30,373 and a stated contribution of NPR 6,075.
• Category 3: NPR 39,242 in total, with a listed wage of NPR 32,701 and a listed contribution of NPR 6,441.
• Category 4: NPR 43,431 in total, including NPR 36,192 paid to the worker and NPR 7,239 for social security.
• Category 5: NPR 45,844 in total, including NPR 38,203 paid to the worker and NPR 7,641 for social security.

The detailed figures attributed to the ministry put Category 2 at NPR 38,448, while a published explanation puts it at NPR 36,448. The listed wage of NPR 30,373 plus the contribution of NPR 6,075 adds up to NPR 36,448. Category 3 also contains an arithmetic mismatch: NPR 32,701 plus NPR 6,441 equals NPR 39,142, which is NPR 100 below the listed total.

The ministry's brief announcement describes NPR 32,607 as a minimum monthly wage with contributions added, whereas the detailed schedule describes that amount as including contributions. Employers and workers need a corrected, authoritative schedule to settle these differences when calculating payments. The listed factory and supplier packages range from NPR 32,607 to NPR 45,844.

Registration becomes a condition for government business

Contractors, labour suppliers, factories, consultants and other service providers participating in public procurement must register all their workers with the Social Security Fund and deposit contributions regularly. Registration and identity cards must be free for workers.

Employers outside the fund cannot participate in public procurement. A company found to have left workers unregistered can also be barred. The restriction can be lifted after the company supplies evidence that every worker has been enrolled.

Electronic records will cover each worker's employment, wages and contributions. Changes to employment or personal details must be communicated to the worker by text message. A person hired for a few days is therefore meant to have a documented record, just as a permanent employee would.

The procedure also accepts an employer's certified monthly workforce statement as the official record, reducing repeated submissions of the same information to different agencies. For public authorities, these records create a clearer account of who worked on a contract and what was paid.

Bank payments and safety duties address immediate risks

Employers must deposit wages directly into each worker's own bank account. Intermediaries cannot take commissions, charge fees for obtaining work or pressure workers to return money after it has been deposited.

When unpaid wages are established, the government can deduct the amount from money owed to the contractor and transfer it directly to workers. This gives authorities a payment route tied to the public contract, alongside the complaints and penalty procedures.

Workplaces must provide safety equipment, clean drinking water, toilets and first aid. Employers are responsible for immediate rescue and treatment after an accident. Government agencies will assist with insurance, compensation and rehabilitation.

These requirements address different needs at the same time. A bank transfer records a wage payment, while drinking water, protective equipment and prompt treatment concern the conditions under which the worker earns it. Employers must meet both sets of duties.

Complaints come with deadlines and protection

Workers can complain orally, in writing or electronically about unpaid wages, denial of accident treatment or benefits, workplace mistreatment and other violations. Employers must resolve complaints within seven days.

A worker whose complaint is unresolved, or who is dissatisfied with the response, can approach a local Employment, Skills and Entrepreneurship Centre or a worker welfare unit. The local centre must notify the relevant parties within three days and begin efforts to resolve the matter within 15 days.

Unresolved cases go to the labour office or, depending on the alleged offence, the appropriate investigative authority. The 15 day provision requires an effort toward resolution; the procedure also provides a route onward when local intervention fails.

Complainants' identities must remain confidential. Employers cannot dismiss workers, reduce their pay, threaten them or retaliate because they complained. These protections apply alongside the right to seek wages or treatment, giving workers a formal way to challenge a violation while still employed.

Penalties range from correction orders to exclusion

Employers violating wage, social security or other worker protections generally receive a red card and an instruction to correct the problem within no more than 30 days. A further violation while that card remains active can trigger a recommendation for blacklisting for at least one year.

Pressuring workers to return wages after a bank deposit attracts a tougher response: blacklisting for the maximum applicable period can be pursued on the first offence, together with repayment of the money taken.

Authorities can withhold contractors' bill payments until problems are corrected when wages remain unpaid for more than three months, foreign workers are employed without labour permits, or workplace safety involves serious negligence. Other listed sanctions include cancellation of registration, forfeiture of security deposits and licence revocation. Affected businesses must receive an opportunity to present their defence under the law.

The procurement announcement also extends enforcement through the supply chain. Businesses purchasing from prohibited suppliers for public contracts can themselves face action, including a recommendation for blacklisting.

Contractors want budgets and paperwork ready

Construction and consultancy estimates must include the public body's additional 10% social security share. Consultancy procurement estimates may also include overhead of up to 15%, covering business expenses beyond direct labour costs. These provisions seek to place the cost of compliance inside the contract budget.

Shivahari Ghimire, general secretary of the Federation of Contractors' Associations of Nepal, said implementation requires revised rate analyses, construction norms and specifications. He also said contractors had not been consulted before the procedure was issued.

Ghimire had raised related concerns during discussion of the Public Procurement (Second Amendment) Act, 2083: temporary crews change frequently, and some foreign workers lack Nepali bank accounts or permanent account numbers used for tax administration. Those are practical registration and payment tasks that contractors and public bodies will need to handle.

The sequence shows how the wage procedure fits into broader procurement changes:

• 4 Shrawan 2083: discussion of the procurement amendment described mandatory social security for construction workers and banking payments to workers and subcontractors.
• At that stage: Ram Prasad Acharya, acting secretary of the Public Procurement Monitoring Office, said revisions to procurement regulations and standard bidding documents were in their final preparation stage.
• By 22 Kartik 2083, identified in the publication details as November 8, 2026: the new wage and social security procedure had been announced, with application to new contracts after issuance.

Gautam described the policy as protecting workers while recognising employers' investment and labour costs. Its practical test is whether budgets, bidding documents, worker registration and payment systems deliver those protections together when new contracts begin.

Key Points

• Construction and field workers have daily packages of NPR 1,740 to NPR 2,400, including social security.
• The public body and employer each contribute 10% of the wage base for construction and consultancy workers.
• Temporary workers and workers paid by the day are covered from their first day.
• Wages must go directly to workers' bank accounts, and compulsory registration is tied to procurement eligibility.
• Employers have seven days to resolve complaints, with escalation available through local centres and labour authorities.
• Violations can lead to withheld payments, procurement exclusion and blacklisting recommendations.
• Some published factory pay figures require correction, while contractors seek updated cost calculations and workable registration arrangements.