Foreign employees contribute to an enormous amount of employment across many countries. Going from one country to another in a foreign land to earn money may not always be an easy choice. For employers and HR who are involved in recruiting, it is a known fact that hiring foreign employees is not a straightforward approach as compared to hiring an employee who is from the home country.
Provisions in Labour Act related to work permits
Restriction on employment of foreigners
As per the Labor Act 2017 (2074); employers cannot employ any foreign citizens as employees without obtaining a work permit from the Department of Labor.
Employers may obtain a work permit through general procedure only if no skilled human resource is available in Nepal.
Before employing a foreign citizen as an employee, the employer must publish an advertisement in the national daily newspaper to hire a skilled person among Nepali citizens.
Suppose despite such an advertisement, no application is received from any Nepali citizen as prescribed or any Nepali citizen cannot be selected. In that case, the employer may make an application, accomplished by the evidence thereof, to the respective department to obtain a work permit for employing a foreign employee. Such a department may, if it deems reasonable upon inquiring into the application and reviewing the evidence shared, may issue a work permit for the employment of a foreign employee.
The employer who recruits the foreign employee by obtaining the work permit must look for skilled Nepali citizens to gradually replace the foreign citizen.
Foreign citizens to obtain a work permit in Nepal
Any foreign citizen who works in Nepal should obtain a work permit as prescribed except where the person is entitled to diplomatic immunity or is not required to obtain a work permit under any treaty or agreement concluded with the government of Nepal.
A work permit may be issued
The Department may, upon maintaining the records, issue the work permit to foreign nationals in the following circumstances:
A foreign nation may be hired as the chief executive in entities with foreign investment or entities working on foreign aid.
Technicians engaged for less than 3 months to repair or maintain any machinery or install any new technology or similar casual work
Language of the contract
While executing the employment contract with a foreign employee or providing information relating to the work to be performed by the employee, or while sharing services and benefits that are available to such employee, the employer should use the English language or the language that the employee understands.
Remuneration may be repatriated in convertible foreign currency
Any foreign employee who has obtained a work permit through the above-mentioned procedures will be allowed to repatriate to their home country the amount of remuneration earned by them in Nepal, in a convertible foreign currency.
Remuneration, conditions of service, benefits and other provisions relating to foreign employees
The remuneration that the foreign employee is entitled to receive for the work performed, conditions of services, and benefits of the employees should be so mentioned in the time based and task-based employment contract entered into between the employer and the employees as not to be less favorable than the standards set by the Labor Act.
The work period of the foreign employee shall be according to the employment contract or if the work period is not mentioned, the employment cannot last for more than 3 years.
Provisions relating to work permits - Labor Rule
Application required for permission of employment:
An application must be submitted to the Department of Labor (DoL), as prescribed by the Labor Rule:
The following documents must be attached with the application:
Original copy of the published job advertisement containing particulars to acquire the skilled person among the Nepali citizens.
Attested copy of passport having validity of at least 6 months.
Bio-data of the foreign citizen.
Proof of payment of applicable taxes by the employer.
Summary of the selection procedure, skills and qualifications of Nepalese candidates, if any, who applied for the job based on the published advertisement.
Work plan to groom and train a Nepalese citizen to substitute foreign labor.
Copy of work approval from the Ministry of Home Affairs, if applicable.
On verification of submitted documents, DoL shall notify with the reason for the rejected applicant within 7 days. If the application is accepted, the DoL shall permit employment within 30 days.
A foreign citizen who wishes to work in Nepal must apply to DOL.
The following charges will be applicable for the Labor permit:
Where an application has been made through the Nepalese Embassy or Diplomatic Missions, the equivalent amount can be paid in convertible foreign currency to the respective Embassy or Mission.
Period of Employment
The permission for employment granted should not exceed the period mentioned below. However, under special circumstances, DoL may grant permission for an additional period after approval from the Ministry.
Extension of Duration
To extend the permission for employment for a foreign citizen, the employer shall apply with requisite documents to the department, 30 days before the expiry date of prior approval.
The number of foreign citizens to be employed
Cancellation of Permit
The DoL may cancel the work permit or the approval in the following cases:
• On the expiry of the work permit provided by the Home Ministry, GoN.
• Non-payment of applicable taxes or any payment due to the GoN within the prescribed time.
• Conviction of labor by the court for any criminal offense.
• In the interest of National Security.
• Negligence in performing duties or depletion of moral values and integrity.
The DoL has the responsibility of inspecting or of directing inspections regarding the employment of foreign citizens. The DoL may direct the employer to terminate services of such foreign citizens immediately, whose permission for employment has not been received or records have not been maintained.
To download the full text and a formal PDF version of the Labor Rule click here.
To sum up, hiring a foreign citizen is not an easy task and requires a lot of effort. If the reason for hiring a foreign citizen is over the concern that you may not find an expert in Nepal, then visit merojob. Here you can find candidates that match your requirements.