Govt mulls hiking guarantee amount for recruiting firms
Kathmandu, July 31
The government is preparing to raise the guarantee amount that the recruiting agencies need to deposit with the government to run their businesses.
The Ministry of Labour, Employment and Social Security (MoLESS) has proposed amending Foreign Employment Act and increasing guarantee amount for recruiting firms by 20 folds from the existing Rs three million to Rs 60 million.
Under the current legal provision, recruiting agencies need to deposit Rs 700,000 in cash and Rs 2.30 million worth of bank guarantee to acquire recruiting licences. There are almost 2,000 recruiting agencies in the country.
Though MoLESS officials were reluctant to speak on record on this issue, they informed that the move to raise guarantee amount for recruiting agencies intends to make manpower agencies more responsible towards migrant workers and compensate victims for fraudulent activities. MoLESS believes that the current guarantee amount is sufficient to compensate only a few fraud victims..
Most importantly, the plan to increase the guarantee amount for recruiting agencies also intends to encourage merger among manpower agencies, according to a source at MoLESS.
A month ago, Minister of Labour, Employment and Social Security Gokarna Bista had urged manpower recruiting agencies to be ready for merger process.
Meanwhile, recruiting agencies have strongly opposed government's plan to raise guarantee amount. They have said that the implementation of such a plan will result in collapse of all recruiting agencies in the country.
“None of the recruiting agencies are in a position to raise the guarantee amount to Rs 60 million. How can recruiting agencies, which are operating through almost Rs 10,000 service charge per client, raise the guarantee amount to this level?” questioned Rohan Gurung, president of Nepal Association of Foreign Employment Agencies (NAFEA).
Moreover, Gurung warned that all recruiting agencies will surrender their licences to the government and halt their business completely if the government forcefully tries to raise the guarantee amount for recruiting firms.
Meanwhile, NAFEA is organising a national meeting of recruiting agencies on Wednesday to form a common opinion on various labour issues, including the government's plan to raise guarantee amount for manpower firms. Similarly, the meeting will also identify types of protests against the government's plan to raise the guarantee amount, as per Gurung.