Informal sector workers have requested their inclusion in the contributory social security system, which so far only insures workers from the formal private sector.
Informal sector workers, mainly construction workers, have requested that the government make arrangements for their registration in the social security system in order to receive various benefits promised under the system for formal private sector workers.
“Construction workers are the first group of workers to have been demanding social security coverage for several years. This is the most vulnerable group of workers, ”Naranath Luitel, president of the Central Union of Painters, Plumbers, Electro and Construction Workers-Nepal (CUPECC), told the Post. “Now that the government has implemented the program by legislating and only involving formal private sector workers, we want to include construction workers in the program as well.”
According to Luitel, the construction industry employs almost 2.5 million people. These include people who are employed in private housing, road and other infrastructure projects, brick kilns, crushing plants and forestry operations.
“Almost 85 percent of the country’s total workforce is employed in the informal sector, but that sector has been removed from the social security system. The government must work to include the sector in the program that will give them financial security in difficult times, ”Luitel said. “The government needs to make the necessary changes to existing law, regulations and working procedures to allow informal sector workers to benefit from the system.”
As part of the social security system, a monthly amount equal to 31 percent of the employee’s basic salary – 11 percent deducted from the employee’s monthly wage and 20 percent contributed by the employer – must be paid into the social security fund.
For their monthly contribution, employees receive financial security in four categories – medical treatment, health protection and maternity plan; Accident and disability plan; dependent family plan; and retirement plan.
Labor rights activists have long called for the social security system, which is in its third year of implementation, to include the informal sector and the self-employed.
“First of all, the government should announce that the informal sector, the largest employer in Nepal, will also be included in the program,” said Luitel.
“Then the government should announce a package for workers in the informal sector in the annual budget, in which it is announced that the 20 percent that is paid by employers will be borne by the government.”
Construction workers groups have also requested that the government also collect and maintain data on the total number of workers employed in the country’s construction sector.
“There are discrepancies in the number of people employed in the construction sector in the country. Therefore, the systematic registration of such workers should be started at the local level, which is not difficult, ”said Luitel. “In addition, workers should be given social security cards.”
The secretariat of the Social Insurance Fund, which manages the fund and is responsible for the implementation of the program, announced that the government has already started internal preparations on how the informal sector and the self-employed can be included in the system.
“The contributory social security system provides that the entire labor sector, be it informal or formal, or governmental or private, is included in the system in phases. For the formal private sector, the system is mandatory for the time being, ”Bibek Panthee, a spokesman for the Secretariat of the Social Insurance Fund, told the Post. “The last two budgets also discussed including the informal sector and self-employed groups in the program.”
According to Panthee, a committee has been set up that is already developing plans and guidelines for the involvement of informal workers and self-employed groups in the program.
“The committee, chaired by a joint secretary from the Ministry of Justice, has consulted other stakeholders on this matter. Draft guidelines were shared with other stakeholders for their feedback, ”said Panthee. “From the next budget year, employees in the informal sector, self-employed groups and temporary agency workers will be able to register with the authorities.”
In February, the government also made massive changes to the 2018 social security system operating procedures to expand the scope of coverage for beneficiaries and to make it easier to access the benefits available under the system.
As of Wednesday, 14,544 employers and 249,277 formal private sector workers had signed up for the social security system, which requires both employers and employees to make monthly contributions.
According to Luitel, tens of thousands of construction workers will participate in the program if the government takes the necessary precautions.
“Construction workers are among the most vulnerable people working in unsafe work environments. Every day there are accidents at work that leave serious injuries and illnesses, ”said Luitel, the president of the construction workers’ group. “If they are registered in the system, they can receive medical treatment and pensions, among other things. The government should create a situation to attract them by making the necessary policy changes.