Policies and programs that can support the formalization of Peruvian society

 

Peruvian society has been in a process of formalization for decades. The Organization for Economic Cooperation and Development (OECD) estimates that 80 percent of the Peruvian economy remains informal. Due to the fact that many workers are outside of the social security system and do not receive the necessary legal protection, the formalization of the economy has become a priority for the government. The formalization measures include a wide range of policies and programs, such as the development of a national employment policy to promote the hiring of formal workers, as well as programs to help informal workers transition into formal employment.

 

The first measure to be considered in helping informal workers transition into formal employment is a modification to labor legislation. The regulatory framework in Peru on employment matters is particularly rigid, allowing employers the use of informal contracts in numerous cases. More flexible forms of hiring, such as part-time employment or remote work, should be introduced to help informal workers enter into the formal world. In addition, employers need a solid understanding of the obligations and rights around hiring and retention of employees. This is achieved through the preparation of employers in terms of compliance with labor and implementation of mechanisms of incentives and protection for workers.

 

Another essential aspect for the success of formalizing the economy in Peru is a service-centered government approach. The registration of overloads and acceptance of invoices associated with employment by the government should be simplified. The Peruvian government should promote measures such as the use of information technologies to process procedures in the overload registry to reduce the burden on informal workers seeking to employ other people in their businesses. In addition, the government should also be able to detect informal workers operating within the social security system and see what can be done to help them become formalized.

Collaboration and Partnerships: Foster collaboration between the government, private sector, and civil society organizations to create an enabling environment for formalization. This involves forging partnerships to provide resources, expertise, and support to informal entrepreneurs as they transition into the formal sector.

Finally, for the formalization of the economy in Peru to be achieved, the government should provide financial and educational support to informal workers. Many informal workers are unaware of their legal obligations and rights as workers. The Peruvian government should implement programs to help informal workers understand their legal responsibilities, such as the payment of taxes and contribution to social security plans, Simplified Registration and Compliance: Implement streamlined processes and reduce bureaucratic hurdles to encourage informal entrepreneurs to register their businesses. This includes minimizing paperwork, reducing registration fees, and providing user-friendly online platforms for registration. The government should also provide financial support to informal workers, such as granting subsidies to workers to help them pay the acceptance requirements of invoices associated with formal employment.

 

In conclusion, the Peruvian government should implement a set of policies and programs to help achieve formalization of the economy. This includes measures to simplify labor legislation, promote the use of information technology to process overload procedures, provide financial and educational assistance to informal workers, and promote understanding of labor rights and responsibilities among employers and workers. These measures will allow informal workers to transition into national formality, allowing for sustained economic development of the country.

       Tuesta, E. (2018). La reforma tributaria-laboral y su influencia en la formalización de las micro y pequeñas empresas peruanas. SCIÉNDO, 21(4), 477-484. https://revistas.unitru.edu.pe/index.php/SCIENDO/article/view/2211.

        Jiménez, O. S. R. (2022). Políticas estatales para solucionar la informalidad laboral de las empresas en Perú y su formalización. Revista CIENCIA Y TECNOLOGÍA,18(1),121/128.https://revistas.unitru.edu.pe/index.php/PGM/article/view/4341.