Informal economy: Over 80pc of workers employed with limited rights, social security: ILO

ISLAMABAD: International Labour Organisation (ILO) findings showed that more than 80 percent of workers in Pakistan are employed in the informal economy, with limited rights, protection, and social security.

Representatives of government, employers’ and workers’ organisations reaffirmed their commitment to advancing the transition to formal and protected work at a national tripartite forum convened by the ILO under the Promoting Rights and Social Inclusion through Organisation and Formalisation (PRS) Phase 2 Project.

The forum brought together over 300 participants to review progress in extending labour and social protection to workers in sectors with high levels of informality — including domestic work, sanitation, and the plastic value chain and to identify priorities for scaling up sustainable interventions. Participants emphasised that strengthening institutions, expanding social dialogue, and improving access to protection mechanisms are essential to improving working conditions and ensuring decent work.

Geir Tonstol, Country Director, ILO Pakistan, emphasised that “No single entity can tackle informality alone, tripartite collaboration is key. When governments, employers, and workers work together, awareness rises, practices improve, and institutions strengthen, ensuring that progress is sustainable.”

Through the project, partners supported measures to extend labour and social protection to domestic workers in Punjab, including the notification of a minimum wage and simplified access to social security registration. These steps support the implementation of the Punjab Domestic Workers’ Act and bring domestic workers closer to formal recognition and protection.

The initiative also strengthened social dialogue mechanisms by supporting collaboration between the Department of Labour, the Punjab Employees’ Social Security Institution and employers’ and workers’ organisations. As a result, new unions were established in the sanitation and plastic value chain sectors, while domestic workers’ organisations across several districts came together to form the first provincial Domestic Workers Federation in Punjab.

More than 10,000 domestic and sanitation workers were mobilised and registered in unions, strengthening their voice and representation. Union council committees were established at the community level to support dispute resolution for domestic workers. With project support, the Lahore Waste Management Company (LWMC) extended social security coverage to over 18,000 waste management workers, alongside improved occupational safety and health measures, including provision of personal protective equipment, paid maternity leave and workplace health services.

Tauseef Dilshad Khattana, Additional Secretary, Department of Labour, Punjab, noted the Government’s commitment to facilitating workers’ transition to formality, adding that initiatives such as digital wallet accounts for low-income households aim to enhance financial inclusion and strengthen accountability in employment relationships.

Heejin Ahn, Regional Project Coordinator of the PRS Project stated that “While informality is complex and multifaceted, our collective achievements through the project demonstrate that when policies, institutions and systems work together, we can unlock pathways to formalisation for workers, enhancing their visibility, dignity and livelihoods.”

Copyright Business Recorder, 2026