Brief
Informality in Nepal’s Construction Sector: Promoting enterprise formalization and extending social protection to construction workers
This brief brings together findings from the sectoral diagnostic of informality in Nepal’s construction sector and insights from relevant stakeholders gathered through a policy dialogue. It highlights the need to advance enterprise formalization and social protection together and presents an evidence-based agenda for policymakers, social partners and development actors to support a sustainable transition to formality.
Nepal’s construction sector contributes more than 6 per cent of GDP and employs around one in seven workers, yet 98 per cent of its workforce is in informal employment. This ILO brief examines the drivers of informality and highlights why enterprise registration alone is not enough to ensure decent work. It calls for an integrated approach that advances enterprise formalization and social protection together, including stronger labour compliance, occupational safety and health, skills development, adaptable social security mechanisms and the strategic use of public procurement. The brief sets out priority actions for government, employers’ and workers’ organizations and development partners to support productive enterprises, protect workers and enable a sustainable transition to the formal economy.