The government will set new recruitment fees for migrant workers only after the revised foreign employment law is enacted.

The announcement came after the Nepal Association of Foreign Employment Agencies suspended a planned shutdown of recruitment companies following talks with Minister for Youth, Labour and Employment Ramjee Yadav on Monday. The agencies had threatened they would stop sending workers abroad from Monday unless the government addressed their 15-point demands, including a clear and realistic service fee.

Yadav told the agencies that the government could not set the new fee until the revised law was in place. The ministry is amending the Foreign Employment Act, 2007, and says the agencies’ demands have been incorporated into the draft.

“The task force’s report has been finalised,” Labour Ministry spokesman Pitambar Ghimire told Kantipur. “We have recommended a scientific basis for setting the service fee.”

A seven-member task force led by Ghimire was formed in June to recommend a fee based on factors including the destination country and the type of job and workers’ monthly earnings. The ministry has not disclosed the amount recommended by the panel.

Recruitment agencies have been demanding a fee equivalent to two months’ salary for unskilled and semi-skilled workers, one month’s salary for skilled workers and half a month’s salary for highly skilled workers.

The government’s move comes as the gap between official recruitment fees and the amount workers actually pay remains a major problem in Nepal’s foreign employment sector. Workers typically pay between Rs150,000 and Rs500,000 to secure jobs abroad, while those going to Europe can pay Rs500,000 to Rs1.2 million, according to government figures.

The Department of Foreign Employment has stepped up action against agencies accused of charging workers more than the prescribed fees. It says 771 recruitment agencies have faced action over illegal fee collection, fraud, worker exploitation, use of intermediaries and other violations. Around 1,200 of the licensed recruitment agencies are currently active across the country.

The government’s draft law seeks to shift much of the recruitment cost to foreign employers. It says employers in destination countries should bear the costs involved in recruiting Nepali workers. Workers would pay a government-set service fee only when employers do not cover those costs.

The draft also bars agencies from charging service or other fees for workers recruited under contracts lasting less than one year.

The Labour Ministry has proposed changes beyond recruitment fees. It plans to simplify the certification of demand letters submitted by foreign employers by introducing an accreditation system through Nepali diplomatic missions.

Under the proposal, an accredited foreign employer would remain on the approved list for two years. Once such an employer submits a demand for workers, the relevant documents could be verified and approved without requiring the employer to undergo monitoring each time.

The draft would also remove the requirement for recruitment agencies to obtain separate prior approval from the Department of Foreign Employment before selecting workers after a demand has been certified by a Nepali diplomatic mission.

Agencies would instead be able to begin selecting workers once the demand is certified, but applicants would have to be selected through an electronic system. Employers’ vacancies would also have to be advertised on the government’s Shram Sansar portal.

The government has been under pressure to curb the high costs of migration despite its repeated pledges to promote “zero-cost” recruitment.

Finance Minister Swarnim Wagle said in his budget speech that the government would promote zero-cost migration and make recruitment fees more worker-friendly. He also proposed collateral-free loans and instalment-based payment arrangements to help workers finance the cost of going abroad.

Nepal introduced a Rs10,000 service-fee ceiling for workers going to Gulf countries and Malaysia in 2015. But after Nepal signed zero-cost recruitment agreements with Malaysia and the UAE, agencies are not allowed to charge workers the service fee in those countries.

Before the ceiling was introduced, the official fee for workers going to Malaysia and the Gulf was Rs70,000.

The latest dispute reflects the difficulty of enforcing the government’s official fee structure in a sector where recruitment agencies compete to secure foreign employers, and workers often pay far more than the prescribed amount.

Mira Acharya, director general of the Department of Foreign Employment, said agencies were reacting to the enforcement of only some provisions of the existing law, particularly those related to recruitment fees.

“Many provisions of the Act have not been implemented at all. Only the provisions related to recruitment fees are being enforced,” Acharya said. “Recruitment agencies are bringing demand letters indiscriminately, and there is intense unhealthy competition among them.”

Of the 406,404 Nepalis who received new labour approvals for foreign employment in the last fiscal year, 268,990, or about 66 percent, travelled through recruitment agencies. Another 31.6 percent left through individual arrangements, while about 2 percent went through government-to-government programmes for employment in South Korea and Israel.

The association said it had suspended its protest only to give the government time to deliver on its commitments.

“We have not backed down from our demands or struggle,” association president Dik Bahadur Khatri said. “We have given the government time to implement the commitments made during the dialogue and negotiations.”

Khatri said the government had committed to advancing the necessary amendments to the Act and regulations within two months. If there was no concrete progress by then, he said, recruitment agencies would resume their protest.