(Source: Viet Nam Social Security)

The Ministry of Labour, Invalids and Social Affairs (MoLISA) partnered with the International Labour Organisation (ILO) to hold a workshop on informal employment in Vietnam on November 27.

According to the General Statistics Office, Vietnam has more than 18 million informal workers, accounting for 57 percent of the country’s non-farm employees. The figure does not include labourers in agriculture. If these people are counted, the number of informal workers in the nation could reach 40 million, more than 70 percent of the total workforce.

In addition, one-third of salaried workers in the formal sector also work informally. The group of 55 to 59 years old holds the highest share of 69 percent among informal workers, followed by the 15-to-24-year-old group with 60 percent. The number of trained labourers in the informal secto accounts for 14.8 percent, much lower than the national average of 20.6 percent. The percentage of trained workers in the formal sector is about 3.7 times higher, equivalent to 55.4 percent.

Speaking at the workshop, Deputy Minister of Labour, Invalids and Social Affairs Doan Mau Diep said workers in the informal sector work in unstable conditions without labour contracts. They also have to work long hours and are underpaid, he noted, adding that the average wage of informal workers is lower than that of formal ones in all jobs.

There should be short-term and long-term policies designed to formalise employment, including economic solutions, the deputy minister proposed.

The informal sector is a part of Vietnam’s labour market, playing an important role in providing jobs for unskilled workers.  The sector absorbs non-farm labourers when the economy faces a crisis, making the economy flexible. Creating more productive employment opportunities and reducing informal workers’ vulnerability would improve the workplace for all people.

A survey on informal employment conducted by the MoLISA’s Institute of Labour Science and Social Affairs indicated that most informal workers did not have their rights protected, particularly in terms of paid leave, sick leave, overtime pay, and labour safety. About 40 percent were not entitled to any benefit, 35.2 percent have not joined the social security scheme, while 8.5 percent said they would like to purchase voluntary social insurance if some amendments were applied to social security regulations, for example, 80 percent wanted to reduce the number of years required for each worker to pay social security premiums.

To ensure the rights and benefits of informal workers, it is necessary to increase public awareness of laws on labour and employment- and social insurance-related policies. It is also vital to improve quality of jobs, working conditions and social welfare for these workers, and to make sure employers sign contracts and pay social security premiums for them.

There should be incentives and support for informal labourers to encourage them to participate in voluntary social insurance and work in the formal sector. Authorities should intensify inspection of labour and employment policies at firms and impose stricter penalties on employers that do not sign labour contracts with or pay social security for employees.

International Cooperation Department