The Social Security Fund (SSF), an undertaking of the Ministry of Labor and Employment (MoLE), has called on employers to extend cooperation in creation of database of employees for early launch of social security schemes.

"Of around 115,000 registered firms in Nepal, only 67 have so far submitted information about their employees," SSF Executive Director Kebal Prasad Bhandari said. "If employers cooperate in this regard, we can start creating database for early launch of social security schemes."

Bhandari made the comments at a program organized in Kathmandu on Monday to handover schemes designed by Peace and Development Studies, which was appointed in January to design social security schemes.

The consulting agency on Monday handed over designs of four social security schemes on sickness, maternity, workplace accident and medicare benefits.

Once these schemes are approved by the MoLE, around 1.25 million workers employed in the formal sector will be entitled to compensation worth thousands of rupees per year for not being able to attend workplace due to sickness, pregnancy, job-related accidents and hospitalization.

Currently, employees are making contribution of one percent of their basic salary -- that does not attract income tax -- to the SSF. Through this, the SSF has so far raised a fund of around Rs 3 billion. Later, the SSF plans to make it mandatory for employees and employers to contribute 10 percent of the basic salary of workers each to run social security programs.

The SSF is currently planning to launch the schemes to cover wage loss of employees working in the formal sector.

Under sick benefit, for instance, workers who remain sick for more than three days and cannot attend workplace will get compensation equivalent to 70 percent of basic salary for a period of up to two months. The coverage period is extendable by up to one month based on approval extended by a committee under the SSF. The maximum amount that employees can claim under sickness benefit ranges between Rs 15,000 and Rs 35,000 based on income level.

Under the maternity benefit scheme designed by the SSF, working mothers will get compensation equivalent to 50 percent of their basic salary for a period of up to two months. The maximum compensation amount that pregnant working mothers can claim ranges between Rs 10,000 and Rs 25,000 based on income level. But in case of maternal death, one-time compensation of Rs 100,000 will be extended to the family of the deceased. And in case of still birth Rs 1,500 will be provided in compensation. Another scheme designed by the SSF is to cover workplace injury or accidents, under which employees can claim a maximum amount ranging between Rs 10,000 to Rs 25,000.

However, in case of death of an employee at the workplace, a minimum of Rs 250,000 and a maximum of Rs 400,000 will be offered to the family of the deceased.

Similarly, in case of permanent total disability, like paralysis of the entire body, 24 months of salary will be provided. But in case of permanent partial disability, like amputation of arms or legs, compensation equivalent to 50 percent of the salary of 36 months will be extended to employees.

On top of all these schemes, the SSF has also designed a scheme called medicare, under which employees will be provided up to Rs 20,000 a year to cover for hospital and medical diagnosis costs. In this scheme, 80 percent of the cost will have to be borne by the SSF and the remaining by workers themselves.

Calling the design of social security schemes a "milestone" in Nepal´s history, Labor Secretary Suresh Man Shrestha said: "We are ready to working together with employers and employees to launch the schemes as early as possible."

Published on: 4 June 2013 | Republica