Nepal struggles to extend social security to its vast informal workforce
Nepal’s informal sector, which employs about nine-tenths of workers, remains largely excluded from the Social Security Fund despite recent registration drives.
The International Labour Organisation reported that more than 86 % of Nepal’s labour force works informally, but the Social Security Fund’s registration list contains merely about 1,500 informal or self-employed workers out of 2.7 million total. Surveys indicate that informal jobs dominate even within registered firms, with construction reaching 98.2 % informality in 2023 and brick-kiln families migrating seasonally. Because informal workers lack stable contracts, their enrollment and contribution collection are difficult, and the SSF’s voluntary scheme introduced in 2023 still sees only six of 114 local governments enrolling workers, largely due to uncertainty over who pays the government’s share.
With 41.9 % of informal wage earners earning below the minimum-wage benchmark, affordable contributions and public co-financing are critical. The piece draws on India’s experience, where the e-Shram portal created a massive database and the Code on Social Security aims to cover gig and unorganised workers, highlighting the need for a reliable, portable, and free registration system in Nepal. Ultimately, success should be measured by actual protection delivered rather than registration numbers, requiring flexible contributions, subsidised benefit floors, and digital ID integration.
Why it matters
Ensuring social protection for Nepal’s informal workers is essential for economic stability and poverty reduction.
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