A committee has been formed to study the fees Nepali migrant workers are required to pay to manpower companies before going abroad for employment. The committee was constituted under the coordination of Pitambar Ghimire, Joint Secretary at the Ministry of Youth, Labour and Employment.
The government formed the study committee to find a long-term solution to the service fee dispute, which has persisted for many years. The committee has been given a deadline of five weeks to submit its report.
The committee has been tasked with studying and providing recommendations on the basis and standards for determining service fees that can be charged to workers going for foreign employment.
The committee includes representatives from the Office of the Prime Minister and Council of Ministers, Nepal Rastra Bank, the Central Bureau of Statistics, subject-matter experts, and the Ministry itself. It has been mandated to recommend a fee structure based on policy and legal reforms, international practices, data-based analysis, conditions in destination countries, workers’ earnings, and manpower companies’ investment and operating costs.
A long-running controversy
The determination of service fees is one of the most contentious issues in Nepal’s foreign employment sector. In 2015, then Labour Minister of State Tek Bahadur Gurung capped the service fee that manpower companies could charge workers going to Malaysia and Gulf countries at a maximum of Rs. 10,000. Under the “Free Visa–Free Ticket” policy introduced at the time, workers were required to pay manpower companies only Rs. 10,000 as a service fee, with the employer responsible for covering visa and airfare costs.
Although the government introduced this policy to reduce the financial burden on workers, manpower businesses have opposed it from the very beginning. Their argument has been that the actual costs, including visa processing, airfare, advertising, office operations, agent management, worker selection, orientation, and other administrative expenses, cannot possibly be covered by Rs. 10,000.
The Nepal Foreign Employment Entrepreneurs’ Association has consistently maintained that it is impossible to send workers abroad at that fee and has demanded that the service fee be set at a minimum of one month’s salary.
The current government, however, has been tightening enforcement of the Rs. 10,000 cap and intensifying action against businesses charging more.
Since last April, rules requiring service fees to be paid exclusively through the banking system have been strictly enforced. The Department of Foreign Employment mandated banking-channel payments to prevent fraud, bring financial transactions into the open, and ensure safer foreign employment.
Businesses have argued that in most destination countries, employers do not cover all costs; agencies from competing countries pay additional amounts; and Nepali companies must bear various operational expenses, making it impossible to provide services within the prescribed fee.
They have been demanding that the fee be determined based on the worker’s salary, destination country, nature of the job, and the company’s investment. Some have advocated for an “open fee system,” while others have called for a defined ceiling within which fees can be charged.
Labour rights activists, on the other hand, have criticised the government’s failure to enforce the Rs. 10,000 cap, noting that despite the ceiling, many workers are still paying hundreds of thousands of rupees due to weak implementation.
Previous attempts at reform
The government had previously conducted various studies and discussions on reviewing the service fee. When Rajendra Singh Bhandari was Labour Minister, a working group was formed under Ghimire’s own coordination to study fee determination, but the process was left incomplete due to elections and the formation of a new government.
An earlier government had set the service fee at Rs. 70,000 for Gulf countries and Rs. 80,000 for Malaysia, effective from Baisakh 24, 2060. That was later replaced on Jestha 26, 2072, when then-Minister Gurung introduced the “Free Visa–Free Ticket” policy with the Rs. 10,000 cap.
Hari Bhadur Pandey, chairperson of the Nepal Foreign Employment Entrepreneurs’ Unity Committee, has demanded that the Rs. 10,000 fee be scrapped and replaced with a minimum of two months’ salary as the service fee, with an option for workers to purchase their own air tickets when the employer does not provide one.
He argued that a proper fee arrangement would protect workers from exploitation, eliminate middlemen, and significantly boost government revenue. He claimed that businesses are effectively forced to collect large sums from workers because the official fee is not viable.
“We have been saying since 2015 that we cannot send workers abroad for Rs. 10,000, and when the state didn’t listen, we challenged the state,” says Pandey to Onlinekhabar.
Rajendra Singh Bhandari, former president of the Nepal Foreign Employment Entrepreneurs’ Association, said that the problems currently plaguing the sector will not be resolved without policy reforms.
He argued that if the government were to implement a proper fee with corresponding policy changes and a banking-based payment system, the fraud allegations levelled against the industry would also be addressed.
What will the new committee do?
The new committee has been tasked with making recommendations based, for the first time, on data, international practices, workers’ incomes, destination country conditions, and the cost structures of businesses.
Following the committee’s report, the government is expected to determine a new framework for foreign employment service fees.
If the fee is raised, businesses will claim relief, but it will directly impact workers going abroad for employment. However, there is hope that if the government can bring fee determination within a transparent and legal framework, the currently rampant arbitrary collection from workers can also be brought under some degree of control.
