The minimum wage of domestic labourers has been increased 38 percent to Rs13,450 per month. The raise will come into effect from the start of the new fiscal year. A meeting held between the umbrella organisations of various business sectors and labour unions on Monday agreed to hike the minimum wage. Previously, the minimum wage was Rs9,700 per month.

Chandra Prasad Dhakal, chairman of the Employers’ Council at the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), said industrialists and workers agreed on the new rate. According to Dhakal, representatives from umbrella organisations such as the FNCCI, Confederation of Nepalese Industries, Federation of Nepal Cottage and Small Industries, Nepal Chamber of Commerce and Hotel Association Nepal, among others, and various workers’ unions were present during the talks.

The meeting agreed to hike the basic salary by Rs2,250 and increase the allowance by Rs1,500. Workers had been demanding that the minimum wage should be raised to at least Rs16,000 per month. The talks held on Sunday failed to reach a conclusion.

According to Dhakal, the revision is in line with the Labour Act 2017 which says that the minimum wage of workers should be revised every two years. The new pay scale will come into effect from the first month of the new fiscal year.

The new labour act also contains a provision which says that employers do not have to pay their employees when production is halted due to illegal protests and strikes. The act allows employees to hold strikes and sit-in programmes to push their demands.

In 2007, the government passed the Labour Regulation and fixed the minimum wage for the first time. The basic salary was set at Rs3,300 per month. This is the sixth time in the last decade that the minimum wage has been revised.

Worker salaries have swollen by Rs10,000 during the period. The last time the government revised the minimum wage was in February 2016 when it hiked the basic pay to Rs9,700 per month and Rs395 per day.

Meanwhile, industrialists in the Sunsari-Morang Industrial Corridor on Monday expressed their dissatisfaction over the revised minimum wage for workers. Organising a press meet, the Industries Association Morang and Morang Merchant Association termed the minimum wage hike an unilateral decision, unscientific and irrelevant.

Bhim Ghimire, president of the Industries Association Morang, said an accord was signed two years ago under which wages would be revised based on inflation.

“The new move could invite confrontation between the workers and the entrepreneurs,” said Ghimire, adding that the annual inflation rate in the last two years was around 4.5 percent while wages had increased by 38.66 percent.

Pawan Sarada, president of the Morang Merchant Association, accused the FNCCI of ignoring the grievances of industrialists. “We are not obliged to implement the new wage as the federation has taken a unilateral decision without consulting with the industrialists,” Sarada said.