Informal sector is a vital surmise in the development area, especially in developing countries like
Bangladesh. When growing population is not provided with enough job opportunities by the
formal sector, they engage themselves in small scale, micro level production and distribution of
goods and services in the informal sector. Transformation of the economic policy in the
surroundings flourishes this informalisation in the labour market. Moreover, target of more
benefit from the firms by manufacturer undermine the working condition of employee in the
organisation. However, lack of job opportunities that push people to work in the informal
economy conceal the bargaining power of labour, downward their wages and undermine their
social protections. This work deficit condition not only exists in Bangladesh but also in
worldwide (ILO, 2012).
The activities of employees in informal sector are usually conducted without proper recognition
from the authorities, escaping the attention of the administrative personnel responsible for
enforcing laws and regulations. The terminology “informal sector” describes the activities that
are not recognized, recorded, protected or regulated by the public authorities (ILO, 1972). The
informal sector consists of small-scale, self-employed activities (with or without hired workers),
typically at a low level of organisation and technology, with the primary objective of generating
employment and incomes that are usually conducted without proper recognition from the
authorities, and escape the attention of the administrative machinery responsible for enforcing
laws and regulations (ILO, 2002). Under the new definition of International Labour Organization
(ILO), the informal economy is comprised of all forms of ‘informal employment’-that is,
employment without labour or social protection—both inside and outside informal enterprises,
including both self-employment in small unregistered enterprises and wage employment in
unprotected jobs (Chen, 2007). In brief, the new definition of the ‘informal economy’ focuses on
the nature of employment in addition to the characteristics of enterprises that includes informal
employment both within and outside agriculture.