The 10-Point Compliance Audit Checklist for Nepali Companies

A practical internal checklist for reviewing employee records, contracts, payroll, workplace safety, statutory obligations, and document control.

For many organizations, a compliance problem does not start with someone deliberately breaking a rule. It starts with something much simpler: a missing document, an outdated record, an unsigned contract, or a renewal date that nobody remembered.

That is why I find a simple internal review useful.

You do not always need a large audit team or a complicated system. A structured check of the records you already maintain can reveal problems early and give the responsible person a clear list of what needs to be corrected.

The checklist below covers the areas I would look at first in a typical Nepali workplace.

Important: This is general operational guidance, not a legal compliance certificate. Requirements vary by organization, industry and workforce, and Nepal’s laws and requirements can change. Always verify current requirements with the relevant authority or qualified professional.

1. Company registration and renewals

Start with the basic question: Is everything that needs to be registered or renewed actually current?

Check that:

• Company registration documents are available and current.
• PAN/VAT registration details are properly maintained.
• Required licenses, permits and registrations are identified.
• Renewal dates are recorded somewhere reliable.
• Someone has clear responsibility for following up before an expiry date.

A document sitting in a file is not enough if its renewal expired six months ago.

2. Employment contracts

Employee files should tell the same story as the employee’s actual working arrangement.

Check whether:

• Every employee has a signed employment agreement.
• The employee received the relevant terms in a language they can understand.
• Position, salary, benefits, working hours, leave and separation terms are clearly documented.
• Salary or position changes have been recorded.
• Verbal arrangements have not replaced written documentation.

Recent joiners deserve particular attention because incomplete documentation is often discovered in newer files.

3. Wages and payroll

Payroll is one of the easiest areas to test because the records should connect with each other.

Check:

• Current wage rates against the applicable legal requirements.
• Salary sheets and pay slips.
• Attendance and overtime records.
• Overtime calculations where applicable.
• Bank-payment evidence where salaries are paid through banking channels.
• Whether changes in salary are reflected consistently in contracts and payroll records.

A useful test is to select a few employees and compare their contract, attendance, payroll and payment record. If the four records do not agree, you have found a gap worth investigating.

4. Provident fund and social security

Where provident fund, Social Security Fund or other statutory contributions apply, check both the calculation and the evidence of payment.

Look for:

• Employee registration records.
• Employer and employee contribution records.
• Payment or deposit evidence.
• Records showing that contributions were made within the applicable timeframe.
• A process for registering new employees when required.

Do not rely only on a spreadsheet prepared internally. Keep the supporting records that demonstrate what was actually submitted or paid.

5. Working hours and leave

Attendance records should not exist simply because someone told the company to maintain them.

They should help you understand how employees actually worked.

Check:

• Attendance records.
• Weekly holidays.
• Overtime records.
• Annual and other applicable leave records.
• Maternity and paternity leave records where applicable.
• Whether leave balances are updated.
• Whether unusual attendance patterns have been explained.

One useful audit test is to compare attendance with payroll for a sample month. Differences often reveal problems that are not obvious when looking at either record separately.

6. Health and safety

A fire extinguisher hanging on the wall does not automatically mean the workplace has a functioning safety system.

Check whether:

• Fire extinguishers and first-aid supplies are available and inspected.
• Emergency exits are accessible.
• Safety instructions are visible where necessary.
• Relevant employees have received safety training.
• Workplace accidents are recorded.
• There is a process for reporting and reviewing incidents and near misses.

The question should not simply be “Do we have safety equipment?”

It should be “Can we show that we maintain it and know how to use it?”

7. Statutory and employee records

Different organizations have different record-keeping obligations, but the basic principle is the same: records should be complete, current and easy to locate.

Check the records applicable to your organization, including:

• Employee information.
• Wage and payroll records.
• Attendance and leave.
• Statutory contributions.
• Other registers required by law or sector-specific requirements.

Also identify who is responsible for maintaining each record and where the latest version is stored.

If three employees each keep a different version of the same register, the organization has a document-control problem.

8. Separation and final settlement

Employee exits deserve the same attention as employee joining.

Check whether the organization has a documented process for:

• Resignation and termination.
• Required notices.
• Disciplinary action where applicable.
• Final salary and other settlement calculations.
• Return of company property.
• Clearance and handover.
• Exit documentation.

Keep records that show how the separation was handled rather than relying on verbal confirmation after the employee has left.

9. Grievance handling

Employees should know where to go when they have a workplace concern.

A practical grievance system should identify:

• Who receives complaints.
• How employees can raise a concern.
• How confidential information is handled.
• How complaints are investigated.
• How decisions or corrective actions are recorded.
• How retaliation or unfair treatment is prevented.

Not every complaint needs a complicated investigation file. But there should be enough documentation to demonstrate that a serious concern was received, considered and appropriately addressed.

10. Document storage and retention

Good compliance work becomes difficult when nobody can find the evidence.

Create a simple structure for important physical and digital records.

For example:

The exact structure will depend on the organization. What matters is consistency.

Also check:

• Who can access confidential records.
• Where backups are stored.
• Whether backups can actually be restored.
• How long records need to be retained.
• What happens when an employee leaves.
• Whether old versions are clearly separated from current records.

Make the review a routine

The biggest mistake is treating compliance as something you check only when an external auditor arrives.

For a small or medium-sized organization, a quarterly internal review can be a practical starting point.

Assign an owner to each area, record the gaps, set a target date and follow up.

The objective is not to produce a beautiful checklist.

The objective is to find problems while they are still easy to fix.

How I would run the review

You do not need to stop normal office operations for a week.

A simple approach is:

1. Set aside two half-days. Use the first session to collect and review records and the second to test the findings.

2. Work one section at a time. Finish one area before moving to the next. Do not try to correct every problem while you are still identifying them.

3. Use samples. For example, in a company with 40 employees, you could review a selected group of employee files rather than opening all 40. Include recent joiners, long-serving employees, employees with salary changes, recent departures and a few randomly selected files.

4. Record findings consistently. Write down what you found, what should have been in place, the potential risk, who will correct it and the target date.

5. Recheck the findings. A follow-up review after several weeks is often more useful than the original checklist because it shows whether the organization actually corrected the problem.

What good preparation looks like

On the day of an internal or external review, you should not have to search through someone’s personal computer to find basic records.

Ideally:

• Employee contracts can be located quickly.
• Payroll agrees with the relevant attendance records.
• Statutory contribution records are available.
• Safety inspections and training records are documented.
• Registers are current.
• Responsibilities are clearly assigned.
• Grievance and disciplinary records are properly controlled.
• Important documents have appropriate backups.

Good compliance is often less about having hundreds of documents and more about being able to produce the right evidence at the right time.

Five findings I would check first

If you have limited time, start here:

1. Missing or unsigned employment contracts

   , particularly for recent employees.

2. Payroll differences

   , especially where attendance, overtime and salary records do not agree.

3. Outdated statutory records or contributions.

4. Safety equipment without inspection or training evidence.

5. Workers engaged through contractors or third parties without a clear documentation trail.

These are not the only areas that can create compliance problems, but they are practical places to start.

Final thought

Compliance should not be something a company remembers only when an auditor arrives.

A good internal review creates a simple habit: check, record, assign, correct and follow up.

You do not need a complicated system to start. You need clear responsibilities, reliable records and the discipline to review them regularly.

If you want a ready-to-use version of this process, you can also use my Compliance Audit Checklist as a starting point.

Sources and further reading

This checklist is based on practical compliance and documentation areas commonly reviewed in workplaces. Specific legal requirements depend on the organization and can change over time. Before relying on any item for a formal compliance decision, check the latest information from the relevant authority.

• Department of Labour and Occupational Safety, Government of Nepal:

  labour administration, workplace inspection and occupational safety information:

  dol.gov.np

• Social Security Fund, Nepal:

  registrations and contribution information:

  ssf.gov.np

• Ministry of Labor, Employment and Social Security:

  labor policies, notices and legislation:

  moless.gov.np

• Department of Foreign Employment:

  information relevant to foreign employment and recruitment agencies:

  dofe.gov.np

Scope note: This is a working internal-review checklist, not a complete list of every legal obligation that may apply to a Nepali company. Sector-specific, employment-specific and regulatory requirements should be checked separately.