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Working in the Informal Sector

All about the Informal Sector in Zambia, Wages and Salaries in the Informal Sector in Zambia, Wages and Labour laws and the informal Sector in Zambia and more on Mywage Zambia.

By Meluse Kapatamoyo

What is Informal Sector employment?

This applies to employment where the employed persons are not entitled to paid leave, pension, gratuity and social security and work in an establishment employing less than five persons. 

Informal employees are also casual or day labourers, domestic workers, unregistered or undeclared workers and some temporary workers or part-time workers. They work in formal or informal firms (small unregistered or unincorporated businesses), households or with no fixed employer. Informal agriculture is also included. 

According to the International Labour Organisation (ILO), the informal sector accounts for 72 percent of employment in sub-Saharan Africa. In Zambia, it accounts for 80 percent.

Wages

Although Zambia’s labour legislation also provides for protection of wages against unlawful deductions; minimum wage requirements; proper notification of wage conditions; the payment of wages in legal tender; the freedom of a worker to dispose of his wages; regularity in wage payments and the treatment of wages as a privileged debt, informal sector workers are among the lowest paid.

Because activities in the informal sector are unregulated by government, many workers find themselves at the mercy of their employers who decide how much wages their job is worth and sometimes when they should be paid. 

 Social security in the Informal Sector

The absence of a well-defined contractual relationship between employers and employees makes workers in the informal sector ineligible to receive social security benefits under the National Pensions Scheme Authority (NAPSA).

NAPSA is a contributory fund which pays benefits to workers who have reached retirement age, those five years below the retirement age but have contributed to the scheme for a prescribed minimum period or those who have contributed for at least 12 months and “are incapable of gainful employment due to total or partial mental or physical incapacity.” 

And other social security authorities like the Public Pension Fund (PPF) only covers workers in the public service by providing separation packages, monthly pensions and survivor’s benefits. But unlike NAPSA, the PPF is noncontributory. It is funded from the national treasury. However, the PPF falls short of the ILO recommended package of social protection as it does not cater for unemployment, sickness, medical care, maternity, employment injury and family benefit. 

More women than men are unemployed in southern Africa 

Zambia’s draft Decent Work Country Programme, DWCP, notes that the majority of workers in informal employment are women, who are often exposed to “personal, financial, economic and social risks and vulnerabilities resulting from their need to find employment and generate income”.

Data from the World Economic Forum’s Gender Gap 2010 shows that South Africa and Namibia have the highest levels of general unemployment in the region for both men and women. They are followed by Botswana where 20 percent of women are unemployed. With 13 percent women and 4 percent men, Mauritius has the highest gender gap. At 11 percent and 10 percent, Zambia and Malawi form the middle band of women’s unemployment while Tanzania, Seychelles and Madagascar have unemployment in the single digits of 6 percent, 5 percent, and 4 percent. In Zimbabwe, the levels of women and men’s unemployment are equal and in the single digits.

What is being done?

SADC member countries are party to the SADC gender equality protocol which provides that by 2015, state parties shall review, amend and enact laws and policies that ensure women and men have equal access to wage employment in all sectors of the economy. It also provides equal pay for equal work, eradication of occupational segregation, maternity and paternity benefits.

Read more

Find out about Minimum Wages in Zambia.

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