Understanding Compensatory Leave in Nepal: What Employees Need to Know

Category: HR Insider | Date: | Total Views: 2266


Nepal celebrates several religious and non-religious holidays. Public holidays are decided based on the festivals and occasions celebrated locally or within the nation. Employees get a paid day off on public holidays as per the Labor Act. They are entitled to take time off from work to relax, enjoy and celebrate their day off


Having to work on holidays




As per the Labor Act, 2017 (2074) if an employee is needed at work during a public holiday, then they need to get an alternate day off. If an employee is engaged in essential tasks that require uninterrupted work, they will be granted compensatory leave in exchange for working on a weekly day off or public holiday.


The employer is required to give the employee who worked on their day off a leave within twenty-one days from the date they worked on their off day.

Compensatory Leave for employees those who worked on holidays


Employees are given compensatory leave as a form of recompense for working on a day that was designated as a holiday. It is a leave that employees can take on their working days as compensation.


The provision related to leaves in Nepal requires employers to provide employees a paid time off as compensation for working on a holiday.


Employee attendance on holidays may be necessary for certain unavoidable circumstances. 


Compensatory leave was created simply because employees may refuse to put a 100% effort without getting anything in return. Until and unless there is an equal reward for the extra effort made employees may feel exploited. Thus, compensatory leave can be considered a way to tempt employees to give their best. 


Before establishing compensatory leave, there was a lot of injustice that affected the employees in general.


  1. Employees were compensated for working on a day off. 

  2. Long working hours without rest took a toll on employees’ health.

  3. Those who worked overtime or during holidays weren't paid enough for their effort.


Terms for granting Compensatory off 


To prevent the misuse of compensatory leaves, companies may have some policies for the needs and requirements of the company as well as the employee. Here are some simple sets of rules for providing compensatory leaves:


  • Compensatory offers shall be granted to every employee of the company

  • In cases where the leave is unused even after twenty-one days, companies may offer payment.

  • Every day worked on public holidays worked will generate each day of compensatory leave.

  • If the public holiday falls on the weekends then some companies allow the public leave to be moved to the start of the new week. 

  • In cases where the leave is moved to next week, employees cannot claim compensatory leave on other days.


An employee can be made to work on public holidays only if it falls on the day they agree to work on. When employees are provided with compensatory off they gain an extra day off. Hence, maintaining the balance between personal and professional life. Compensatory-offs can be considered a win-win situation, where both the employee and employer are satisfied. If HR is finding it difficult to track the compensatory leaves, RealHRsoft has an easy and quick leave management system that helps allocate days off. 


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