Employment in Bangladesh remains largely informal. Out of a total population of over 165 million, roughly 70.5 million people are employed. However, a staggering 84.9% of this workforce operates in informal or undocumented employment.
This labour force is excluded from formal payrolls or administrative oversight. Only about 10-11 million workers enjoy the security of documented employment with clear links to social protection. The digital labour registry(DLR) promises to solve the challenges that come from informal employment.
What is a digital labour registry?
A DLR is a secure, government-managed information system for recording essential labour force data on each segment of the workforce. This includes formal employees, construction workers, migrant labourers, gig and platform workers, and the self-employed.
By linking a worker’s profile to their National Identity (NID) document, the registry can create a verifiable professional identity that the workers can carry to access services and opportunities. It can transform abstract data into a tangible asset for the worker.
On the other hand, it will allow the government to track labour force mobility, identify gaps, and design and implement policies to address the gaps. For the employers, it can provide access to labour force data in real time.
Why is it important?
DLR’s rationale is rooted in both social equity and economic survival. Currently, the lack of comprehensive labour force data makes it impossible to target social programs or monitor labor law compliance. DLR can be specifically important for three reasons:
- Trade compliance: Even though Bangladesh has applied to defer its LDC graduation for 3 years, it will have to prepare for the graduation. To avail facilities like EU GSP+ after the LDC graduation, international buyers will require proof that labour rights are monitored across all sectors. Without a database, auditing informal supply chains will be impossible.
- Social protection: The registry can act as an input into the National Social Security Strategy (NSSS), ensuring that workplace accident insurance and health allowances reach those who need them. This can also be integrated into the government’s family card scheme and ensure overall efficiency in targeting and implementation of the scheme.
- Recognizing the modern economy: Gig and platform workers generate significant value but are often adversely incorporated. They are digitally included but are excluded from legal protections. The DLR can provide official recognition to gig and platform workers.
How should it be implemented?
The implementation must be phased and inclusive.
- Lead agency: The Ministry of Labour and Employment (MoLE) should lead a cross-ministerial steering committee involving the ICT Division, the NID authority, and worker representatives.
- Multi-channel registration: To ensure inclusion, particularly for women and marginalized groups, registration must happen where the workers are. This includes union digital centres, city corporation ward offices, and EPZ offices.
- A phased roadmap: A 24-month plan should move from a prototype in industrial clusters (phase 1) to full integration with NID, tax, and training systems (phase 2), followed by nationwide optimization (phase 3).
What lessons can we learn from the world?
The concept is not new and Bangladesh does not need to reinvent the wheel. ILO and The World Bank proposes that a digital labour registry (DLR) should be integrated into broader digital employment diagnostics to ensure it serves multiple policy functions:
- Formalization of the informal economy: The ILO views the registry as a prerequisite for achieving decent work by making invisible workers visible to the state.
- Protection of personal data: The ILO emphasizes that registries must operate within a legal framework that enforces purpose limitation and accountability to protect workers' personal information.
- Life-cycle social protection: Following World Bank advice, these systems are designed to link workers to social safety nets throughout their careers, moving away from fragmented, one-off aid packages.
- Evidence-based planning: Both organizations advocate for registries that provide aggregated, anonymized data to help policymakers track sector shifts and determine minimum wages based on empirical evidence rather than estimates.
Besides, lessons suggest that the DLR can perform the best if it is:
(i) interoperable;
(ii) the data set is standardized;
(iii) inclusive of all segments of workers, specifically, women, people with disabilities, and the marginalized communities.
Gains to achieve
The impact of the DLR includes but is not limited to:
(i) rapid identification of beneficiaries for emergency relief or aid during crises as factories face closures due to economic, natural, or pandemic shocks;
(ii) increased efficiency for employers in obtaining compliance certificates and subsidies on training, alongside better matching of certified workers to overseas employment via the NSDA and BMET databases;
(iii) the transition of workers from informal work to formal higher-paying jobs through tracked certifications and skill recognition.
Risks and mitigation strategies
The system comes with risks that must be managed. To minimize the risk of data misuse and surveillance, a data trustee model can be pursued with a data controller and processor backed by MoUs that restrict data sharing to authorized government agencies for approved purposes.
To address the risk of exclusion of workers without internet access, utilize offline registration pathways through local government helpdesks like the union information centres. To address the risk of low uptake among workers and employers, create tangible incentives so that registration is linked to immediate benefits like compliance certificates.
The digital labour registry can be a bold step by the government towards employment and inclusive growth. It will send an important signal on the government’s willingness to support compliance across industries.
It will also trigger the change towards formalizing the work force of Bangladesh, most of whom remain outside the purview of policy support. Mostimportantly, it will help the government realize its vision towards accelerated employment.
Md Rubaiyath Sarwar is Managing Director, Innovision Consulting.
