Freelancer Misclassification in Nepal

The Labour Act predates much of the recent growth of app-based gig work and does not establish a separate category for platform workers.

It does not expressly codify concepts such as algorithmic management, ratings-based control, automated account deactivation or platform-determined pricing as classification factors.

Platform relationships must consequently be fitted into the Act’s existing categories of employment, labour supply or genuine independent service provision.

The following circumstances may support the existence of employment when interpreted through the Labour Act:

• the platform or client determines when and where the work is performed;

• the worker must personally perform the assignment;

• detailed instructions or performance standards are imposed;

• remuneration or task prices are effectively fixed;

• the worker is monitored or rated;

• the platform can suspend access to future work;

• the work is continuing or forms part of the organisation’s normal activities;

• the worker has little opportunity to negotiate;

• the worker bears limited genuine commercial risk; and

• the person does not independently offer an organised service to the market.

These are analytical indicators rather than a formally codified Nepalese checklist.

A platform may perform different legal functions depending on its model:

• a neutral marketplace may connect independent businesses and customers;

• a service provider may contract to deliver a result using independently organised resources;

• an employer may directly engage workers;

• a labour supplier may employ workers and make them available to clients; or

• an unlawful supplier may trigger deemed employment with the main employer.

The contracts between the parties must be examined together with how the platform actually operates.

The current framework leaves unresolved questions concerning:

• algorithmic management;

• automated suspension and deactivation;

• transparency of rating systems;

• access to platform data and evidence;

• cross-border platforms;

• responsibility where multiple entities control the work;

• occupational protection for location-based gig workers; and

• collective representation of economically dependent freelancers.

Until specific legislation or authoritative case law develops, organisations should document the allocation of control, payment, risk and employment responsibilities.