KATHMANDU: Manpower companies are taking exorbitant service charges from outbound Nepali workers after the government increased the ceiling of collateral to be deposited by manpower companies.

The companies have been charging the exorbitant amount of money in the name of service charges since April 2019. According to Chandan Guragain (name changed), who is preparing to leave for Kuwait, the company charges a fee equivalent to the salary of a month.

He said, “The government has increased the collateral of manpower companies. Now the service charge of foreign job aspirants will increase. The service charge of a migrant worker bound for Kuwait was Rs 180,000. Now it has increased to Rs 300,000.”

Similarly, another youth, who insisted anonymity, told Khabarhub that he submitted Rs 450,000 in service charges for the job of a security guard in the United Arab Emirates (UAE) through a manpower supply agency belonging to a former vice-chairperson of Nepal Association of Foreign Employment Agencies (NAFEA).

These are only some representative cases of fraudulence. Manpower companies have been fleecing over 800 Nepali migrant workers on a daily basis charging them excessively high amount of fee than the ceiling fixed by the government.

“With the increment in the collateral of the manpower companies, it is normal to raise service charges,” said Saroj Pokharel, general secretary of the NAFEA.

He further said, “The government has increased the ceiling of collateral. The business will not run only by increasing the collateral. We need facilities, too, to run the business smoothly. The government is not providing any facilities to manpower entrepreneurs so far. That is why we have raised service charges, too. The government has to rethink on this issue.”

The Ministry of Labor, Employment and Social Security has increased the collateral of the manpower companies under three categories in accordance with the Fifth Amendment of Foreign Employment Act, 2007, which came into force in February 2019.

On the other hand, Bhola Guragain, information officer at the Department of Foreign Employment (DoFE), has asserted that the Department will take legal action against those manpower companies who charge a higher amount of fee than the one fixed by the government.

“If the victim comes to the Department with the evidences, we will penalize the defaulter. The manpower companies have no right to increase charges when the government has raised the ceiling of collateral,” said Guragain.

The Ministry of Labor, Employment and Social Security has increased the collateral of the manpower companies under three categories in accordance with the Fifth Amendment of Foreign Employment Act, 2007, which came into force in February 2019.

According to the amendment, the manpower companies have to deposit Rs 5 million in collateral along with a bank guarantee worth Rs 15 million if they supply less than 3,000 Nepali workers to foreign countries a year.

Similarly, those supplying 3,000 to 5,000 Nepali workers have to deposit Rs 10 million in collateral along with a bank guarantee of Rs 20 million and those supplying more than 5,000 have to deposit Rs 20 million in collateral along with a bank guarantee of Rs 40 million.

The government in June 2015 had announced a free-visa-free-ticket scheme with the aim of facilitating migrant workers leaving the country in search of jobs in Malaysia and the Gulf countries.

A total of 848 manpower companies have furnished the collateral at the DoFE by September 4, accordingly. Prior to the amendment to the Foreign Employment Act, 2007, the companies had to furnish Rs 3 million including Rs 700,000 in collateral and a bank guarantee of Rs 2.3 million.

Manpower companies have been demanding with the government to allow them to take service charges equivalent to the salary of one month from a migrant worker as they have to manage tickets themselves if not provided by the employment providing companies. However, the government is tight-lipped on this issue.

The government in June 2015 had announced a free-visa-free-ticket scheme with the aim of facilitating migrant workers leaving the country in search of jobs in Malaysia and the Gulf countries.

But, the manpower companies have still been taking up to Rs 500,000 from a Nepali worker in service charges against the decision.