Nepal's labor market will be fully formalized

In a meeting held in Geneva between Labor, Employment and Social Security Secretary Ghanshyam Upadhyay and senior officials of the ILO, it was agreed to completely formalize Nepal's labor market. In order to formalize the labor market, which is the largest part of the informal sector, the Ministry of Labor passed a five-year strategic plan to formalize the informal sector in Nepal on June 21.

We have made a five-year strategic plan to formalize the labor market with the active participation of the union, state and local governments. It has been agreed that the ILO will provide technical support for its effective implementation,' Labor Secretary Upadhyay said to Kantipur, 'ILO will participate in developing the capacity of all three levels of the government.' . Among them, 26 lakh 75 thousand (15.4 percent) are employed in the formal sector. 44 lakh 11 thousand (84.6) are in the informal sector. The largest share of the informal is in the agriculture, forestry and fisheries sector at 21.5 per cent, construction at 13.8 per cent, retail trade at 17.5 per cent and transport at 4.5 per cent.

Labor expert Ramesh Badal says that workers working in the informal sector are not guaranteed to get the benefits of contract, social security and gratuity. The working hours of workers working in the formal sector are fixed. Usually the workplace is the same. Decent labor is practiced. Social security is ensured with minimum salary, gratuity, and compensation," he said, "but the informal sector is not covered by the labor law."

The labor law issued by Nepal in 074 has eliminated the informal sector in Nepal. The Labor Act 074 has worked to cover all labor sectors, remain as a minimum level and bring all workers within the scope of social security. The Labor Act is not only applied to the establishment but also to the salary of the employer.

Labor Act 074 provides that the employment relationship will be determined based on the type of employment the worker is involved in rather than how the work is done,' Badal said, 'If there is work that is required continuously, regular employment, fixed-term employment, Fixed-term employment, temporary employment if less than seven days in a month, and part-time employment if less than 35 hours a week are required.'

Based on this provision, the government has determined the monthly, daily and hourly minimum wages. The Ministry of Labor has introduced a contribution-based social security program for those in formal, informal, foreign employment and self-employment. But its implementation is very weak. Very few workers have participated in the fund.

According to the five-year strategic plan of the Ministry of Labour, diagnosing sectoral formalization in agriculture, construction and transport sectors as well as focusing on women, identifying the preferences, abilities and needs of domestic workers to make workers in informal employment/self-employment fully participate in social security programs. An action plan has been made, including conducting a national survey on capacity. In 2015, the ILO approved a recommendation to transform the informal economy into a formal one. It is considered as a powerful tool to achieve sustainable development goals.

The biggest challenge for Nepal is to transform the mainly informal labor market into a formal one that protects workers' rights, said Numan Ochakan, head of ILO Nepal. "Nepal is working by making its action plan to formalize the informal sector. This is Nepal's attempt to address the challenges brought about by the changes in the world economy and labor market,' he said at a recent event in Kathmandu Purnachandra Bhattarai, a labor administration expert and former secretary, says that it is very difficult to bring self-employed and domestic workers into the formal sector. A large number of self-employed professional establishments are not registered. They should be brought into the registration process. The task of including workers in the informal sector through the local level to social security is very challenging in itself, he said.