Abstract: This study explores the pivotal role of labor policy in promoting economic development in Nepal, particularly within rural areas, where approximately 66% of the population is engaged in agriculture and informal employment (FAO, 2024; Nepal Economic Forum, 2024). Effective labor policies are essential for improving livelihoods, reducing poverty, and supporting inclusive growth. This research highlights the importance of comprehensive labor policies that safeguard workers rights and stimulate economic activities, addressing key rural challenges such as low productivity, seasonal employment, and limited market access.