Nepal Government Directs Business and Private Sectors to Pay Festival Allowance to Employees

The Department of Labor and Occupational Safety has directed major trade bodies, private businesses, and private school associations to ensure that all workers and staff receive their legally mandated festival allowance (Dashain bonus).

The department reached out to key private sector leadership bodies including the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), the Confederation of Nepalese Industries (CNI), and the Nepal Chamber of Commerce urging them to instruct affiliated establishments to disburse the funds. Additionally, separate directives were issued to private school umbrella organizations, namely PABSON and N-PABSON, to guarantee festival expenses for teachers and staff working in private educational institutions.

Under Section 37 of the Labour Act, 2074, every worker has the legal right to receive an amount equivalent to one month of their basic salary each year as a festival allowance, intended for celebrations based on their religion, culture, and traditions.

Workers who have served for less than a full year are also entitled to a proportionate amount. The department has emphasized that employers who fail to comply with this legal provision can face official complaints and subsequent legal action through local labor offices.