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Tag: Nepal Labour Act

OP-EDs and Columns

Job Guarantee for Social Security


The opinion piece originally appeared in The Kathmandu Post on 13 April 2023. Please read the original article here.

The recently published Nepal Population and Housing Census 2021 shows an alarming trend: The population of children is decreasing, and the dependent population over 60 is increasing. In 10 years, the population under 14 dropped from 34.91 to 27.83 percent while the population over 60 rose from 8.13 to 10.21 percent. As the average life expectancy of citizens grows, the age imbalance in the population increases the state’s financial responsibility, primarily social protection, in future.

The window of opportunity for Nepal to take advantage of the demographic window is pretty small. To fully realise the demographic dividend, it is necessary to increase the domestic job environment and investment in the skills of Nepali youth. The government has two options with regard to job creation: Making the Prime Minister Employment Guarantee Programme more effective or creating a favourable environment for the private sector to create better jobs.

Job guarantee

On the one hand, Nepal’s share of economically active people working in the agriculture sector is decreasing due to increasing attractiveness in the service and industry sectors (according to the 2021 census, 57.3 percent of the population depends on agriculture). On the other hand, the share of the economically inactive population is found to be students, as well as those engaged in household work and family care, old age people, and persons with disabilities, etc. So the question is: How do we leverage Nepal’s labour force by employing them in productive sectors, striking a balance between the agriculture and non-agriculture sector?

In this regard, job guarantee is one of the structural stabiliser fiscal policies that the government can undertake to promote employment. With a basic wage and benefits package for anyone, especially the economically active population willing to work, a job guarantee should be the mantra of the government. The Nepali labour market has seen high involuntary unemployment rates for several years, and the Covid-19 pandemic has further aggravated it. A targeted job guarantee programme can be an effective and equitable policy for achieving full employment and reducing poverty and income inequality.

The government should work in partnership with companies in the private sector to implement creative employment interventions, such as skill development and job placement, that raise wages for workers and boost productivity at businesses in high-growth industries. While creating jobs, the government must check if employers adhere to employee welfare, labour rights, workplace safety, and social protection regulations. Building a solid base for employment opportunities helps the government generate revenue in the form of taxes.

Nepal is currently working with the World Bank to create an Integrated Social Registry, which can act as a platform to link social protection programmes and information systems and address several other issues, including those related to the front end (service delivery) and back end (information system). Touting social protection programmes looks politically appealing, but it is financially challenging. Promoting job guarantee would reduce the impact on the public budget, and employing the job guarantee workers on projects that encourage domestic production could minimise the trade balance.

Existing laws

Nepal’s social protection system comprises contributory social insurance for formal sector workers, non-contributory social assistance, and employment initiatives. Significant legislative reforms, such as the Contribution-based Social Security Act, Labour Act 2017 and the Civil Service Act (Third Amendment 2014), have been enacted to strengthen the country’s social protection system. The primary contributory social insurance programmes for formal private sector workers are the Social Security Fund (SSF) and the Employees’ Provident Fund (EPF) for public sector employees. The non-contributory side of the system is intended to benefit “the most vulnerable sectors of the population.” The four programmes, namely, medical, health and maternity protection, dependents protection, accident and disability protection, and old age protection, were also introduced. The social protection coverage rate is modest, with pensions having the highest coverage rate. Two recent guidelines, one pertaining to migrant workers and the other to those employed in the informal sector and who are self-employed, on expanding social security safety nets are a step in the right direction.

The gradual expansion of social security programmes over the years is a positive step towards ensuring social security and protection for the people. However, their effectiveness has been hindered by insufficient human resources, planning, and coordination. Human Rights Watch has pointed out that Nepal’s social protection system is inadequate in protecting children from poverty and perpetuates inequalities between formal and informal workers. The targeted programmes are often too narrow in scope, while the selection processes can be expensive, inaccurate, and susceptible to corruption. Additionally, many eligible individuals may face difficulty applying or choose not to apply due to the associated stigma. For example, social institutions and welfare policies may consciously or unconsciously stigmatise impoverished children, reinforcing their sense of failure and shame. This is especially so in cases where poverty is attributed to individual shortcomings rather than structural factors. Universal child benefits are more likely to foster social cohesion. They are cognisance recipients as rights holders entitled to support rather than merely beneficiaries, which can affect their civic engagement and the government’s accountability.

Past experiences

The Karnali Employment Programme (KEP) was designed similarly to the Prime Minister Employment Guarantee Programme currently implemented in Nepal, as it involved the creation of employment through infrastructure projects at the local level, resulting in the construction of physical assets. The KEP was marketed under the slogan “one family, one job” (Ek ghar, ek rojgar) and aimed to provide 100 days of employment to each participating household, specifically targeting households without any employed members. The programme provided a specified number of work days to participating households every year rather than a limited period of employment on a one-time basis.

Although KEP faced budgetary and operational constraints at the local level, which hindered its effectiveness in providing employment to all eligible households and compromised its performance as an employment guarantee scheme, these challenges should not be taken to mean that similar initiatives cannot be developed in Nepal. It is important to note that KEP was designed to address the historical underdevelopment of the Karnali region rather than to serve as a blueprint for a nationwide scheme in the future. Just like in Bangladesh, the government can prioritise certain sectors like the garment industry to create a favourable environment for the private sector or strengthen government-led employment programmes to create more jobs.

Most social protection is linked to formal employment. This social protection system exacerbates inequality since informal sector workers are likely to be poor due to low wages and unpredictable employment. Low minimum wages and good job opportunities in Nepal have led to large-scale out-migration. Hence, creating a favourable environment for the private sector to generate more work opportunities or strengthen government-led employment programmes is important. Domestic employment aids the government’s financial responsibility to support the social security system in Nepal.

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Increasing Gender Diversity in Nepal’s Tech Sector

ANKUR Shrestha

Historically, women’s participation in the tech sector has been remarkably low due to the patriarchal classification of jobs. As a consequence, it led societies to believe that men automatically belong to the fields such as IT while leaving a very narrow space for women. This has caused only a few women to study and subsequently enter the tech sector.

Nevertheless, this is changing, as it rightly should. According to Deloitte Global, the tech industry is making steady progress in shrinking its gender gap. In 2019, overall female representation in large global technology firms was 30.8 percent. Deloitte estimated that women’s share in the overall global tech workforce increased by 6.9 percent from 2019 to 2022. Public commitments by large tech companies to improve gender diversity also aided this increase. Intel, for example, aims to double the number of women and underrepresented minorities in senior leadership roles by 2030. Similarly, HP pledged to reach 50 percent gender equality in roles at the director level and above by 2030.

In Nepal, we see a similar upsurge. According to Nepal’s 2011 census, only 1,117 females studied computing while the number increased to 11,078 in 2021. This shows a monumental increase of about 892 percent in female students in the tech sector during the ten-year period. It also beats the overall increase in students studying computing which amounts to more than 668 percent which is significant by itself as well.

Conversations with women professionals working in Nepal’s tech sector show that one major reason for this uptick is that IT has set itself as an industry better suited for women workers. However, our societal structure has for long had restrictions for women to work (especially after marriage), restricts economic freedom, deems late office working hours as unsafe, treats periods as taboo, considers men as primary breadwinners, and puts less value on women workers. The IT sector provides a workaround for many of these societal issues. Asmita Bajracharya, Product Manager at Innovate Tech says that work in the IT sector can usually be done from home and has flexible work timings, project-based pay, space for freelance work, and a relatively higher pay scale compared to other industries. All these, therefore, she believes make the sector one of the best for working women in Nepal. 

However, the IT sector is also rife with issues depending on which company you analyse or whom you talk to. IT startups are particularly problematic while established companies usually have stringent policies in place. However, we see such discrimination usually persist in smaller and newer companies even within the IT sector. Additionally, smaller companies generally have issues such as longer working hours, and no set leave policies. Nepal’s Labour Act 2017, Chapter 7 Section 33, also requires arrangements for transportation to and from the workplace in employing a female where the working hours begin after sunset or before sunrise. Advocate Sadikshya Maharjan says that this particular section, while well-intentioned, can also cause smaller companies to discriminate in hiring women as they are not able to provide these services.

Another area of the Labor Act, Chapter 2 Section 7, prohibits discrimination in remuneration for equal work. However, unequal pay issues continue to persist in the sector. IT companies are usually structured around payment through projects. Therefore, discrimination while assigning job responsibilities leads to a vicious cycle where companies assign lesser-paying projects to women, leading to lower performances in performance reviews. This subsequently leads to less pay and lower chances of promotion resulting in more incidences of discrimination. Ojaswi Poudel, currently a Software Engineer at Cotiviti, says that she faced such blatant discrimination in one of her previous workplaces. However, she believes having women in senior positions in the company can help break this cycle. She also sees the need for senior women mentors so that younger women have someone to look up to and gain more confidence in this field. She says she does not face such issues in her current company which is more structured, has proper mentorship, and has clear payment policies.

Sadhana Gurung shares similar advantages in her company. Gurung who works at Leapfrog Technology currently as a Software Engineer, QA has proper mentorship models, flexible timings, as well as opportunities for growth in her company. This might also be one of the reasons why it is easier to get more motivation from peers and have women-friendly policies at the office. She also notes how despite fewer women currently working in IT, even clients and senior management are happy to see women workers, are welcoming, and provide proper career guidance.

While it would be a generalisation to say that there is very less discrimination based on only three experiences, trends do point towards more inclusion and provisions of a more equitable working environment for women in tech. With more women choosing the tech sector for their studies and work, and established companies having non-discriminatory policies, the tech sector in Nepal seems to be slightly ahead of the curb than other workplaces in Nepal. A study by McKinsey research showed that the most diverse companies are 48 percent more likely to outperform the least gender-diverse companies. It is then to the benefit of everyone to create a more gender-diverse workplace. There is more to still do to achieve gender parity but the tech sector in Nepal definitely seems to be heading in the right direction.

This blog is a part of NIPoRe’s blog series on Women’s History Month 2023.