Kathmandu, May 5

The government has asked firms based in Kathmandu Valley to mandatorily register the details of their firms and their employees and make regular deposits at the Social Security Fund (SSF).

Earlier, the government had published a notice asking employer firms to register themselves and their employees compulsorily at the SSF by the end of this fiscal year.

“If firms fail to register the details of their employees by the end of this fiscal year, the government will take legal action against such firms,” said Shankar Nepal, director of Social Security Fund under the Ministry of Labour, Employment and Social Security.

It has been more than five months since the government launched the ambitious social security scheme for formal sector workers. However, employers, even those based in Kathmandu, have shown little interest to participate in the scheme. As per SSF, only 2,567 employers within Kathmandu Valley have registered for the programme so far.

Nepal further informed that if employer firms do not register the details as sought by the fund within the stipulated time, then the fund will be compelled to take action against such erring firms. “We will charge 10 per cent interest on the amount that needs to be contributed and also block the bank accounts of such firms as per the Contribution Based Social Security Act.”

As per law, private sector employees will have to mandatorily contribute 11 per cent of their basic salary to the fund, while employers will have to contribute another 20 per cent of the employees’ basic salary.

The employers were given three months for the registration initially. However, the government extended the deadline till mid-July.

“The number of firms that have registered themselves at the fund is below our expectations and we hope the number will increase gradually in the remaining time,” Nepal said.

Meanwhile, the private sector has argued that the government needs to amend some of the key provisions that are mentioned in the law. However, the private sector had welcomed the programme when it was initially launched.

The Joint Trade Union Coordination Committee (JTUCC) has accused the employers of not fulfilling their commitment.

“Employers are intentionally delaying in submitting the details of their firms and employees, which is not acceptable,” said Binod Shrestha, president of JTUCC.

Shrestha added that the social security scheme was launched based on a tripartite understanding between the government, employers and labour unions.

Following years of meticulous effort and preparation, the government launched its contribution-based Social Security Scheme amidst a special function on November 26. The scheme is set to include 3.22 per cent for medical, health and maternity benefit; 4.52 per cent for accidental and disability benefit; 0.87 per cent for dependent family members and 91.39 per cent for old-age security. The government plans to extend the scheme to workers in the informal sector soon.