Building a Fairer Future: Nepal’s Journey Toward Inclusive Wage Reforms

The workshop saw active engagement from national leadership. Honourable Minister Sharat Singh Bhandari, representing MoLESS, reinforced the government’s commitment to ongoing reforms.

Ensuring fair wages is not just about improving individual livelihoods—it’s a transformative strategy to promote decent work, reduce poverty, and create a foundation for social justice. In Nepal, a country facing persistent wage disparities, informality, and gender-based inequalities in the labour market, wage policy reform has emerged as a cornerstone of inclusive and sustainable economic development.

Recognizing the urgency of the issue, the International Labour Organization (ILO) and Nepal’s Ministry of Labour, Employment and Social Security (MoLESS) co-hosted a three-day technical workshop in Kathmandu from April 23–25, 2025. The event, themed “Designing and Implementing Effective Wage Policies in Nepal,” brought together a diverse group of stakeholders—including government officials, employers’ associations, and trade union representatives—to strengthen wage-setting mechanisms through dialogue, research insights, and international best practices.

Nepal’s Early Commitment to Fair Wages

Nepal has long shown a commitment to fair wage principles. It was the first country in South Asia to ratify the ILO Minimum Wage Fixing Convention, 1970 (No. 131), signaling its dedication to establishing a transparent, inclusive, and evidence-based wage-setting system. This ratification laid the groundwork for a tripartite approach that includes government, employers, and workers in wage policy design.

The current initiative seeks to reinforce these principles by enhancing institutional capacity and promoting consensus on how to establish fair and sustainable minimum wage systems that reflect the country’s evolving economic and social realities.

The Role of Data and Dialogue in Policy Design

In his opening remarks, Numan Özcan, ILO Nepal Country Director, emphasized the broader meaning of wages. “Wages are more than just numbers on a payslip. They represent the value of work, fairness of the economy, and the dignity of working people,” Özcan stated. He stressed the importance of designing wage floors based on living costs, productivity data, and business sustainability. Such data-driven and participatory approaches, he argued, will benefit both workers and enterprises and contribute to resilient economic growth.

The event leveraged the ILO Wage Policy Guide and Global Wage Report 2024–25 as key resources. Case studies from other countries were shared, offering valuable insights into wage determination frameworks and enforcement mechanisms.

Government Vision: A Multi-Level Responsibility

The workshop saw active engagement from national leadership. Honourable Minister Sharat Singh Bhandari, representing MoLESS, reinforced the government’s commitment to ongoing reforms. He pointed out that Nepal has already established a permanent wage-fixing body and is guided by evolving policy factors.

“Automation can play a constructive role in reducing conflict during wage negotiations and create a more investment-friendly economic environment,” he said. However, the Minister also underlined the importance of context. “What constitutes a decent wage? What is the minimum required for a dignified life? These are questions shaped by Nepal’s unique circumstances.”

He further noted that ILO guidelines and resolutions should serve as reference points, but the responsibility lies with Nepal to tailor these tools to its own labour market challenges. Strengthening domestic employment structures will be key to achieving lasting reforms, he added.

Broader Governance and Policy Challenges

In closing remarks for the first day, Pradeep Kumar Koirala, Joint Secretary of MoLESS, highlighted the governance complexity in implementing effective wage policies. He called for intergovernmental coordination involving the national, provincial, and local levels.

"Should the minimum wage be a fixed number or based on dynamic indicators? Should it be uniform or vary by industry?" Koirala posed these questions, reflecting the unresolved debates in wage policy formulation. He advocated for deeper consultations and broader mandates for local governments, urging them to play roles beyond monitoring.

He acknowledged that the workshop is an opportunity to examine international examples, clarify conceptual frameworks, and shape a practical roadmap for Nepal’s wage reforms.

A Roadmap to Inclusive Growth

The Kathmandu workshop represents a critical milestone in Nepal’s journey toward fair and inclusive wage policies. The initiative reflects the ILO’s global mission to promote decent work and strengthen labour institutions. For Nepal, it’s a step toward building a more equitable labour market that values all workers and fosters sustainable economic growth.

By grounding wage-setting practices in social dialogue, robust data, and international standards, Nepal is positioning itself to address long-standing labour market inequalities. As discussions evolve into actionable policies, the country’s commitment to social justice through fair wages becomes clearer—and more achievable.