Working Hours and Overtime in Nepal — Labour Act Rules

Normal Working Hours

Section 28 prohibits an employer from requiring ordinary work exceeding: 8 hours in one day

or

48 hours in one week.

Both limits matter.

A schedule may satisfy the weekly total but still breach the daily maximum.

Rest Break

After: 5 continuous hours of work the worker must receive: 30 minutes' rest.

Where operations cannot stop, the employer should provide the break on a rotational basis.

The statutory break is counted within the working hours.

Overtime Is Not Unlimited

Section 30 permits overtime up to: 4 hours per day and

24 hours per week.

Therefore: ordinary 48-hour week

maximum statutory overtime of 24 hours does not mean employers should routinely schedule 72-hour weeks as normal employment.

Overtime remains subject to the Labour Act's protections.

Worker Cannot Normally Be Forced to Work Overtime

Section 29 provides that a worker should not ordinarily be compelled to work beyond the standard hours.

An exception exists where failure to complete the work could materially affect:

• life;

• health;

• safety; or

• cause serious loss to the employer,

subject to the statutory overtime limits.

Overtime Pay

Section 31 requires overtime remuneration equal to: 1.5 times the worker's basic remuneration rate.

The ordinary base is basic remuneration. Section 31(2) preserves the specific collective-agreement arrangement and managerial employment-contract arrangements described there; these do not justify a general waiver for all workers.

Example — Monthly Employee

Assume monthly basic remuneration: NPR 30,000

The employer should derive the applicable basic hourly rate using the legally appropriate payroll basis and calculate overtime at: Hourly basic remuneration × 1.5

Retain the basis used to derive the hourly basic rate from the employee’s remuneration and working schedule. Calculate approved overtime from that rate and the applicable statutory multiplier.

Work on Weekly/Public Holiday

Where a worker involved in continuous/non-stoppable work performs work on:

• weekly holiday; or

• public holiday,

Section 42 provides compensatory leave.

The compensatory leave should be given within: 21 days.

Where the worker is not given the compensatory leave contemplated by Section 42, Section 30 treats that work as overtime.

Weekly Holiday

Every worker is entitled to: one weekly holiday each week.

The Labour Rules also require payment of remuneration for the weekly holiday.

Public Holidays

An ordinary worker is entitled to: 13 paid public holidays per year including May Day.

A female worker is entitled to: 14 paid public holidays including International Women's Day.

Where a regulator determines the holiday schedule for a particular establishment, that regulatory schedule applies.

Working Time Must Be Defined

Section 32 provides that starting and ending time should follow:

• the employment agreement; or

• employer determination where the contract is silent,

subject to the Labour Act.

CMA recommends stating normal:

• start time;

• finish time;

• lunch/rest;

• working days;

• overtime-authorisation procedure

in the employment agreement/service rules.

Attendance Records

Employers should maintain reliable records of:

• arrival;

• departure;

• leave;

• overtime;

• holiday work;

• compensatory leave.

The official Labour Audit framework specifically tests compliance with the 8-hour/48-hour standard, break requirement and overtime remuneration.

Overtime Approval

A good payroll control is: Employee/manager requests overtime → Authorised supervisor approves → Attendance verifies actual hours → Payroll calculates overtime → Employee receives payment/compensatory benefit → Records retained.

This avoids informal overtime claims at year-end.

Working Time Checklist

• Maximum 8 normal hours/day

• Maximum 48 normal hours/week

• 30-minute break after 5 continuous hours

• Break counted as working time

• Overtime properly authorised

• Maximum 4 overtime hours/day

• Maximum 24 overtime hours/week

• Pay overtime at 1.5× basic rate

• Give weekly holiday

• Give public holidays

• Track holiday work

• Give compensatory leave within 21 days where applicable

• Maintain attendance

• Reconcile overtime with payroll

Common Errors

Using eight hours as a target but ignoring the 48-hour weekly cap

Excluding the statutory half-hour rest from working hours

Calculating overtime on an arbitrary flat amount

Treating overtime as included in salary without legal basis

Making employees routinely work holidays without compensatory leave or overtime treatment

Keeping no attendance evidence

Further guidance and practical checks

Working-time compliance should be built into attendance and payroll systems. Where the employer cannot prove actual working hours, overtime disputes become significantly harder to defend.