Unorganized Workers & Labour Laws

In India, a sizeable share of the labour force falls under the category of informal or unorganized labour. In 2009–10, 46.5 million individuals were employed countrywide, with around 2.8 million of them working in the organized sector and the remaining 43.7 million in the unorganised sector, according to a poll by the National Sample Survey Organization (NSSO). The agriculture sector employs 24.6 crore unorganized people, the construction sector 4.4 crores, and manufacturing and services the remaining.

The dictionary describes the unorganized sector of the economy as a small, unimportant industry located in homes that are not organized on a large scale. Handicrafts, artisan jobs, village and khadi enterprises like the handloom sector, beedi making, agarbatti making, hand paper creation, and matchbox industries, among others, may all be found in the unorganized sector of the Indian economy.

Meaning of Unorganized Workers

The phrase "unorganized worker" refers to a home-based worker, a self-employed worker, or a wage worker in the unorganized sector under Section 2(m) of the Unorganized Workers Social Security Act, 2008. It includes an employee of an organized sector company who is not protected by any of the welfare acts listed in Schedule II of the Unorganized Workers Social Security Act, 2008. 90% of all Indian workers are unorganized, which controls the country's labour market.

Classification Of the Unorganised Labour Force

According to occupation, type of work, notably troubled categories, and service categories, the Government of India's Ministry of Labour has divided the unorganized labour force into four groups −

  • For the Purposes of Occupation − This category includes small and marginal farmers, landless agricultural labourers, sharecroppers, fishermen, people working in animal husbandry, beedi rolling, labelling, and packing, building and construction workers, leatherworkers, weavers, artisans, salt workers, people working in brick kilns and stone quarries, people working in sawmills and oil mills, etc.

  • In accordance with the nature of the employment − This group includes contract and occasional workers, migrant workers, attached agricultural laborers, and bonded labourers.

  • In accordance with the terms of the especially distressed category − This group includes toddy tappers, scavengers, loaders and unloaders, carriers of head loads, and drivers of animals-powered vehicles.

  • In the category of Terms of Service − This category includes midwives, domestic helpers, fishermen and women, barbers, vegetable and fruit merchants, newspaper vendors, and so on.

Unorganized Workers Problems

90% of the labour force in India works in the unorganized sector. They encounter numerous issues because they are the weaker group in society. The sector of the economy faces several difficulties, notwithstanding its contribution. They are as follows −

Low Pays

The lowest-paid workers in society are those who are not organized. The unorganized workforce does not receive comparable remuneration for equivalent effort. They do not receive additional incentives, allowances, bonuses, or fringe perks.

Lack of Access to Basic Amenities

In addition to being overcrowded and in very filthy conditions, the unorganized labourers' working spaces lack basic water and sanitation facilities. They occupy a small space that is overcrowded. Basic necessities including education, health care, and nourishment are denied to the children of these labourers.

Lack of knowledge regarding workplace safety

The majority of unorganized workers are unaware of their workplace hazards. They are unaware of the significant risk of factory dust, harmful chemicals, or the loud noise produced by old machinery. They experience issues with their hearing, eyes, skin, musculoskeletal system, headache, and cardiovascular system.


Workers in unorganized industries are less protected than those in organized sectors. They end up being the worst victims of abuse, exploitation, and starvation. Particularly the women and child workers are not paid equally for their equal job, and they have little recourse.

Acts and Policies of the Government of India Relating to Unorganized Workers

The unorganized worker suffers a variety of issues despite making a significant contribution to the national economy. The Government of India has implemented numerous programs, regulations, and pieces of legislation to assure the social security of the labour part of society in order to address the complex issues faced by unorganized laborers. Numerous social security measures have been added to the Indian Constitution after independence in the form of Directive Principles of State Policy (DPSP).

Additionally, in order to safeguard the interests of workers, the Government of India passed a number of laws, including the Industrial Disputes Act (1947), the Coal Mines Provident Funds and Miscellaneous Provisions Act (1948), the Minimum Wages Act (1948), the Employees Provident Funds and Miscellaneous Provisions Act (1952), the Maternity Benefit Act (1961), the Contract Labour Act (1970), the Payment Gratuity Act (1972), and the Building and Construction Workers Act ( But these Acts hardly ever benefit and safeguard unorganised employees. Because of this, the Indian government passed the Unorganized Worker's Social Security Act, 2008, whose sole purpose is to provide social security for India's unorganized workers.

Act of 2008 for Unorganized Workers' Social Security

The Unorganized Employees' Social Security Act, of 2008, was passed by the Indian government in an effort to support unorganized workers' access to social security. This Act is specifically created for unorganized employees to implement policies for life and disability, health and maternity benefits, old age protection, and any other benefits specified by the central government.

Additionally, the Act lists 10 social security plans for unorganized workers, which are discussed below −

The National Family Benefit Scheme (NFBS)

A component of the National Social Assistant Program is the National Family Benefit Scheme (NSAP). If the family's primary breadwinner, including the female (if she is the only one), passed away naturally or due to an accident, the grieving family will receive aid under the program in the amount of Rs.20,000 (Sinha et al, 2017). The 18–60 age range is eligible for this incentive.

The Janani Suraksha Yojana (JSY)

The National Maternity Benefit Scheme, a part of the National Social Assistance Program, was renamed the Janani Suraksha Yojana when it was introduced in 2005. (NSAP). The program's goal is to give women who fall below the poverty line financial help in the amount of Rs. 500 for prenatal and postnatal maternity care for their first two live births if they are at least 19 years old (Jerinabi & Santhi, 2012).

The Handicrafts Artisans Comprehensive Welfare Scheme (HACWS)

The Handicraft Artisans Comprehensive Welfare Scheme has two sub-schemes. One is the Rajiv Gandhi Shilpi Swasthaya Bima Yojana, which has recently merged with the Rashtriya Shilpi Swasthaya Bima Yojana, and the other is the Bima Yojana for Handicraft Artisans. Male and female handicraft craftsmen in the age range of 18 to 60 are offered life, accidental, and disability insurance through the Bima Yojana for Handicraft Artisans (Annual Report 2007–2008, Handicraft Ministry of Textiles).


According to this guideline, the fisherman must make a contribution of Rs. 100 every month for nine months. For a period of nine months, the central and state governments each contribute Rs. 100. As a result, 900 rupees will be handed to the fishermen for three months as a relief during the three-month term of the fishing prohibition, out of the total savings of 2700 rupees.

Participation of India’s judiciary in protecting The Rights of Unorganized Workers

The judiciary is solely responsible for safeguarding the interests of the less powerful members of society. In a number of rulings, the Supreme Court of India emphasised the right to livelihood as an integral component of the right to life.

Here are the following case laws −

  • Democratic Rights v. Union of India

  • Sanjit Roy v. State of Rajasthan

  • Rural Litigation and Entitlement Kendra, Dehradun v. Uttar Pradesh

  • Deena v. Union of India

  • Sanjit Roy v. State of Rajasthan

  • Neeraja Chaudhary v. State of Madhya Pradesh

  • Bandhua Mukti Morcha v. Union of India

Article 21 states that bonded labour should be identified and that efforts need to be made by the government to complete the rehabilitation of the laborers. Directive Principles of State Policy were enacted as guidelines for the government.


Low earnings, harsh treatment by employers, subpar housing conditions, etc. are just a few of the issues that unorganized labourers in India confront. One crucial area that the government ought to acknowledge if it wants to combat poverty in the nation is social security. There are other programs for the welfare of unorganized workers in addition to the Unorganized Workers Social Security Act of 2008, such as an old age program, a life insurance program, a health insurance program, etc.


Q1. Is the unorganized sector registered with the government?

Ans. No, unorganized sector are not registered with the government.

Q2. Who controls the unorganized sector?

Ans. The Ministry of Labour and Employment looks after the unorganized sector.

Q3. What is an example of an unorganized sector?

Ans. Example of an unorganized sector in India is the informal labour market, which includes workers in industries such as agriculture, construction, and domestic work. These workers often lack formal contracts or legal protections, and may not have access to social security or benefits.