Formal employment
Topic: Employment, Unemployment and Informalisation · NCERT: Beyond NCERT
Meaning
Formal employment means a job with a written contract and social security, such as provident fund, pension and health cover. The job itself is what makes it formal or informal, not the place of work. A job in a big, registered firm or a government office is still informal if it has no contract or social security. Informal employment makes up about 90% of India's workforce.
Example
A bank cashier with an appointment letter, PF and health cover is in formal employment. A temporary computer operator in a state government office has no such contract or benefits. They work in a formal establishment, but their employment is informal.
Don't confuse with
- Formal (organised) sector: this is defined by the enterprise. It covers all public-sector establishments, plus private ones with 10 or more hired workers. Formal employment is defined by the job.
Related concepts
- Casualisation of workforce
- Informalisation
- Informalisation of the organised sector
- Contract labour
- Social discrimination in the labour market
- Informal employment
- Formalisation of the economy
- Decent work