Transition from Informal to Formal Employment Project Uzbekistan


Informal employment in Uzbekistan is pervasive and is around 60% (over 6mln), while substantial share of workers is under-employed. Informal economy has been growing already before the pandemic and has been further accelerated by the economic crisis caused by theCOVID-19 pandemic, which has resulted in dismissal of an additional 1.9 million persons (over 14% of total employment) and the return of thousands of Uzbek labour migrants. In the private sector, 61% of women employees and 73% of men employees lack social security coverage. In small private enterprises, 80% of women employees and 87% of men employees lack social security coverage. Acknowledging the impact of COVID-19 containment measures on workers, the Government increased the amount of unemployment benefit to the level of minimum wage. However, the minimum wage is not aligned with the cost of living and the benefit covers a limited number of unemployed persons.

Despite certain progress achieved, problems with decent work and productive employment persist. According to the Ministry of Employment and Labour Relations, number of employed in the economy in 2020 reached 13.23 million with only 5.7 million employed in formal sector of economy. Informalization may further increase new risks that have emerged as a result of the wide use of unregulated telework arrangements and digital labour platforms mostly in the services and transportation sectors.

Ambitious reforms and development agenda of the Government of Uzbekistan highlights promotion of employment and decent working conditions for all, improvement of social protection and social inclusion among the key priorities. The relevant aims and objectives are formalized in the overarching policy documents of the Government – The Strategy of Actions on Further Development of Uzbekistan in 2017-2021. The recent Voluntary National Review (VNR) confirms the Government’s intention to further integrate national SDGs into national development programmes and rely on SDG framework to monitor and evaluate progress in implementation of reforms. VNR also highlights national SDG 1 and 8 among the most exposed to various risks and thus in need of specific attention of the Government and development partners.

Project overview

Overall objective: To support the constituents in providing adequate labour protection to workers in the informal economy and diverse forms of work arrangements, through new, innovative and integrated policy measures, including by increased representation of their interests in social dialogue mechanisms at all levels.

Key interventions:
  • Equip constituents with gender-responsive diagnosis on the regulatory environment and compliance gaps in labour protection for workers in diverse forms of work arrangements, including on digital platforms and in informal employment, assessing its incidence, drivers, vulnerability of workers, etc.;
  • Support the development of integrated and innovative strategies to facilitate the transition to formality as part of national employment and social protection policies, in line with ILO Recommendations №204, №202 and relevant international labour standards;
  • Improve integrated employment, social and labour protection services and compliance mechanisms to facilitate the transition to formality and prevent informalization of formal jobs, in line with ILO Recommendation №204;
  • Provide constituents with social protection schemes for inclusion of selected groups of workers in informal economy with contributory capacity into unemployment protection scheme and the extension of maternity protection to all workers in informal economy; support in drafting the documents for ratification of ILO Convention №183;
  • Strengthen institutional, organizational and technical capacities of workers’ organizations at the national and sectoral levels (i) to attract, organize, integrate, protect, service and represent informal workers, and(ii) to shape and influence sustainable economic, social and environmental policies, taking into account gender equality challenges.
  • Facilitate qualitative and meaningful social dialogue based on respect of freedom of association and the right of informal economy workers to organize.
Key activities by Outcomes:

Name of Outcome


Outcome 1 - Validated diagnosis of the informal economy and/or policies, regulations or compliance mechanisms to support the transition to formality of informal workers in formal enterprises or in households


Gender-responsive diagnosis assessing the incidence, forms and drivers of informality of workers in informal employment carried out in consultation with social partners, validated and adopted by the Government

Based on the diagnosis, a strategy developed by the constituents, with proposed areas of action to facilitate the transition to formality, a gender-responsive assessment of the risks of informalization, including those induced by COVID-19 and other crises on workers engaged in informal economy

A gender-responsive monitoring system to assess progress towards formalization of informal employment is in place and sex-disaggregated data are available to monitor their formalisation

Mapping of Uzbekistan workers’ organizations’ structures, governance and operations, as well as services they provide to members, carried out to guide necessary changes for modernized internal institutional and organizational processes, and adjusted internal regulations to successfully integrate and represent informal workers

Validation of the findings and recommendations of the Assessment, subsequently to be adopted by the decision-making bodies of workers’ organizations, to amend/adjust constitutions/internal regulations

The national statistical office’s capacity is strengthened and made able to measure employment in informal economy

Policy advice and technical support to workers’ organizations to develop new strategies to attract and provide innovative services to informal workers in line with R204, ACTRAV report Trade Unions in the Balance, ACTRAV manual on organizing informal workers; ACTRAV&INWORK: “A Compendium of Practice: Interaction between WOs and Workers in the IE

Capacity building of workers’ organization on ILS relating to formalization of informal economy including education (to cover 200 labour leaders/activists and over 2000 informal workers in at least 7 sectors), information and advocacy campaign promoting access of informal workers to FoA, other labour and social safeguards

Workers’ organization implemented information and advocacy campaign to improve compliance with a law, policy and regulation to improve worker protection

Outcome 2- New or revised integrated policy responses including social protection to support and protect workers and employers during their life and work transitions

Capacity building of constituents to formulate and implement social protection policies inclusive of informal workers and promoting gender equality (C102, R202, C183, C156);

Constituents developed schemes for the extension of maternity protection to workers in informal economy; documents for ratification of C183 drafted

Improved integrated employment and social protection services and compliance mechanisms developed to facilitate the transition to formality and prevent informalization of formal jobs, in line with R204

Constituents developed unemployment schemes for the inclusion of selected groups of workers in informal economy with contributory capacity that are tested