Informal workers in Viet Nam tend to have low and irregular incomes, long working hours and little access to opportunities for skills development. As they are not recognized, registered or regulated, and thus not protected by labour market institutions, people in informal employment are exposed to what is known as “working poverty”.

Experience has shown that workers and their families in the informal economy often suffer because they are not covered by labour legislation. For instance, when it comes to safety and health requirements relating to working conditions, they do not receive the security of social benefits. In addition, the voice of people involved in informal employment is rarely represented in institutional decision-making. Enterprises in the formal economy face unfair competition from the informal sector as prices for goods and services are lower when no tax or social security contributions are paid. Like in many other emerging economies around the world, the informal sector in Viet Nam, which constitutes a major part of the labour force, plays an important role in the everyday life of Vietnamese.

While providing an important source of employment and income-generating opportunities to many Vietnamese people, the life of workers in the informal sector in Viet Nam is characterized by low incomes and by precarious labour conditions, making them more vulnerable to external shocks. The Government is trying to expand the protection to this group by improving the legal framework and developing policies to address the challenges of the informal economy.