Transition to formality A regional knowledge sharing forum for Latin American and Caribbean countries 24th to 28th August 2015 Lima, Perù
Characteristics of domestic workers Structure of the presentation Domestic Workers Convention, 2011 (No. 189) and national legislation on domestic work Transition from the Informal to the Formal Economy Recommendation, 2015 (No. 204) Measures to promote the formalization of domestic work (social security, inspection, incentives, other measures) Regional study on policies concerning the formalization of domestic workers in LAC. FORLAC programme Work in progress. A lack of information on the Caribbean and some other countries. Very recent measures: lack of information on impact 2
Characteristics of domestic work in Latin America Latin America (18 countries selected): Domestic workers by sex, 2013 (in percentages). 93% of domestic workers in Latin America are women. 3
Characteristics of domestic work in Latin America Latin America: Ratio of domestic workers to total people in employment by sex. 2010-2013 4
Characteristics of domestic work in Latin America Latin America. Ratio of domestic workers to total people in employment by sex. 2010-2013 5
Characteristics of domestic work in Latin America An extremely undervalued job with limited protection On average, domestic workers earn an income which is half (51%) the average income for all people in employment. This figure increased by 6 points between 2003 and 2013. In Argentina, Brazil, Costa Rica, El Salvador, Nicaragua, Panama, the Dominican Republic and Uruguay, domestic workers receive an income which is less than half the average of all people in employment. In 2013, the percentage of people engaged in domestic work and contributing to the social security system was 28%; this is very low, but represents a 10% increase over the last decade. Highest levels of social security insurance: Uruguay (42.2%), Brazil (41.5%), Ecuador (33%) and Argentina (22.7%). Very low level of social security insurance: Bolivia (1.2%) and Mexico (2.7%). 6
Characteristics of domestic work in Latin America 7
Characteristics of domestic work in Latin America 8
Characteristics of domestic work in Latin America 9
Convention No. 189 and legislation on domestic work in the countries of the region First generation of standards favouring informality in the sector. Different schemes were established with a lower level of recognition of rights. This lower level of recognition took the form of different strategies: Special chapters on domestic work in Labour Codes (Nicaragua, Costa Rica, Panama, the Dominican Republic, Bolivia, Chile, Guatemala, El Salvador, Honduras, Ecuador and Venezuela) Exceptions established throughout the Labour Code (Colombia) Special laws (Argentina) Regulation via decree (Peru) There was no specific legal standard in Uruguay. 10
Convention No. 189 and legislation on domestic work in the countries of the region 21st century: Wave of reforms with the aim of ensuring equal rights and promoting formalization of the sector (Bolivia, 2003 Uruguay, 2006 Costa Rica, 2009) 2011: Adoption of ILO Convention concerning decent work for domestic workers (No. 189) 2011-2015: More countries implement reforms (Venezuela, 2012 Argentina, 2014 Chile, 2014 Brazil, 2015 Ecuador, 2015) 2015: Ratified by Argentina, Bolivia, Chile, Colombia, Costa Rica, Ecuador, Nicaragua, Panama, Paraguay, the Dominican Republic, Uruguay. 11
Convention No. 189 and legislation on domestic work in the countries of the region Contract C. 189: written contracts (Art. 7): In the majority of countries, contracts can be agreed verbally. At the moment, only Argentina, Chile and Costa Rica stipulate that contracts must be written, along with Bolivia in cases where the employment relationship has duration of more than 1 year. Hours of work, rest periods and holidays C. 189: establishment of fair working hours and conditions, with the recognition of overtime, rest periods and holidays 12
Convention No. 189 and legislation on domestic work in the countries of the region Hours of work, rest periods and holidays The South American countries and Costa Rica: definition of hours of work totalling 48 hours divided up into eight hour days, except in Chile where hours of work total 45 hours per week. El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama and the Dominican Republic do not regulate hours of work. They do establish a minimum rest period of between nine and 12 hours a day. Rest periods: The majority of countries stipulate weekly rest periods of between 1.5 and 2 days per week. Exceptions: Bolivia, Colombia, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama (1 day/week). There are still differences when it comes to live-in positions. 13
Social security Convention No. 189 and legislation on domestic work in the countries of the region C.189: Members should take appropriate measures to ensure that domestic workers have access to social security protection (Art. 13). The majority of countries offer some option for social security insurance within the general system and recognize the obligation of registering. This is not sufficient The particular characteristics of the work (part-time, multiple employers, live-in or live-out, etc.) require adjustments in the general system. Argentina, Colombia and Uruguay allow part-time and/or multiple employer contributions. 14
Convention No. 189 and legislation on domestic work in the countries of the region Social security Exceptions: Honduras, El Salvador, Guatemala and Mexico Voluntary registration. Special schemes providing a lower level of coverage to these workers in comparison with other workers. 15
Minimum wage Convention No. 189 and legislation on domestic work in the countries of the region Convention No. 189: Domestic workers should be paid directly; payment in kind is permitted subject to certain conditions (Art. 12). 13 countries recognise a minimum wage for workers. Four countries do not recognize payment in kind as part of wages (Argentina, Brazil, Bolivia and Chile) Seven countries permit between 20% and 50% of wages to be paid in kind. El Salvador, Honduras, Peru and the Dominican Republic do not have regulations governing minimum wages for domestic workers. (This is a problem for social security registration). 16
Recommendation No. 204 concerning the transition from the informal to the formal economy Adequate legislation. In accordance with Convention No. 189, which grants equal rights to domestic workers. Extending social security protection: Income security. Minimum wage. Preventative measures and measures to guarantee compliance with standards. Adequate inspection systems. Incentives. Guaranteeing freedom of association and the right to organize. Policies in education and the development of competencies. 17
Main measures identified on the regional level to formalize domestic work Integrated approach: Uruguay Approval of Law 18.065/2006 and its implementing regulation in 2007. Efforts to increase the number of domestic workers registered with the social security system form part of a campaign to increase registration numbers in general. Additional measures: Dissemination campaigns Incentives linked to registration Strengthening of inspections Since the Law was approved and up to 2012, the number of domestic workers contributing to the social security system increased by 48.7%. This represents the incorporation of 21,109 people to the social security fund (BPS) and an annual increase of more than 7%. 18
Main measures identified on the regional level to formalize domestic work Recognition of rights and specific nature of the work: Colombia Decree 0721/2013 recognizes the right of domestic workers to be registered to a Family Welfare Fund. Decree 5094/2013 offers the possibility of social security for part-time and/or multiple employer work: Registration with subsidized social security health scheme Contributions to Pensions Fund, Family Welfare Fund, and the Health Risk Administrator. Since 2013, registration with the Family Welfare Fund has increased by 367.1%. 19
Main measures identified on the regional level to formalize domestic work Increased sanctions linked to non-compliance in matters of social security: Ecuador By means of a reform carried out to article 244 of their Criminal Code (August, 2014), non-compliance with the payment of social security can be sanctioned with measures including a prison sentence: Sanctions of 3 to 7 days in prison. There is a period of 48 hours as of reception of the notification for the amount owing to be paid before the sanction is enforced. The reform entered into force in August 2014. We do not have data on its impact. 20
Main measures identified at regional level for the formalizing of domestic work Inspection: Registration Systems Argentina: Compulsory registration of a work permit card issued by the Ministry of Labour. Bolivia: Compulsory registration of the employment contract at the regional or provincial labour administration. The Wage and Safety and Health at Work Booklet is provided at that time. Chile: Compulsory registration of the contract, at the offices of the Labour Inspectorate or electronically. Peru: The employment relationship must be registered at the Home Workers Registry of SUNAT (Superintendency of the National Customs and Tax Administration). 21
Main measures identified at regional level for the formalizing of domestic work Inspection of homes: Strategies used Argentina: Carrying out of inspection to request the Work Permit Card, without the need to enter the home. Uruguay: Carrying out of inspection to request documentation showing the situation of the domestic worker. Documentation requested: Registration in the BPS, registration in the BSE, slips showing wages, vacation pay and Christmas bonus. Ascertaining of the workday, rest periods and overtime. Between 2010 and 2013, the Inspectorate General of Labour and Social Security (IGTSS) carried out more than 10,000 inspection actions. The majority of them were carried out on its own initiative. 22
Main measures identified at regional level for the formalizing of domestic work Progressive increase in the minimum wage Argentina: Law No. 26.844 sets out that it will be set periodically by the National Commission for Work in Private Homes (CNTCP). 2014: increased 30% (20% in September 2014; 10% in January, 2015). Ecuador: National Wage Council (CONADES) established an equivalence between the minimum wage for domestic workers and the overall minimum wage (2007 2010). Increases: 2008: 417%; 2009: 176%; 2010: 20%. Between 2008 and 2013, the average wage of domestic workers in comparison to the wage of people in employment went from 53% to 59%, three points above the regional average. 23
Law 20.279/2008 includes domestic workers in the mechanisms for setting of the minimum wage in effect for the rest of the female and male workers, and establishes a mechanism for equivalence to the overall minimum. Time periods: 2008: 75%; 2009: 83%; 2010: 92%; 2011: 100%. Results: Main measures identified at regional level for the formalizing of domestic work Progressive increase in the minimum wage: Chile Growth of 71.6% in the minimum wage. Greatest failure to comply?: Went from 8.1% in 2000 to 13.6% in 2011 (transitory?). Inspection of private homes with domestic service : 2.5% of inspections as regards compensation and 2.1% of the sanctions applied in 2011. 24
Main measures identified at regional level for the formalizing of domestic work Minimum wage: Uruguay Law 18.065 incorporates people working as domestic workers into the overall mechanism for the setting of wages. o 2008: Wage Council convenes Wage Group 21: Domestic Work, and provisions get adopted that have meant a real increase of 97% in the minimum wage for domestic work between 2008 and 2014. o In 2010, more than 70% of the people occupied in this activity received wages equal to or above the minimum. This percentage increased to 73% in 2012. 25
Main measures identified at regional level for the formalizing of domestic work Measures to encourage formalization: Argentina Law 20.063 (2005). Deduction from gross profit taxed of the total of the amounts paid over the tax year (remuneration and amounts for social security). Sharp increase in sign-up in 2006. Creation of the Simplified Registry of employment relations in private houses (2013). Law 26.476 (2008) sets out reduction in contributions to social security, and facilities for payment of debts that have been due for 24 months. Impact: Registration of people working as domestic workers has increased from 22.3% in 2008 to 28.4% in 2013. 26
Main measures identified at regional level for the formalizing of domestic work Measures to encourage formalization: Uruguay Simplification of the procedure: The amount for the insurance policy (State Insurance Bank BSE) is included in the BPS bill (2014). For 85% of employers this also means more economical insurance. Impact: It is expected that the number of workers covered by Workplace Accident Insurance doubles, reaching the totality covered within BPS. (65 thousand female and male workers, compared to the 30 thousand up to the present time covered by the BSE). 27
Main measures identified at regional level for the formalizing of domestic work Promotion of unionization: Bolivia FENATRAHOB brings together 15 trade unions and three organizations, and is affiliated to the Bolivian Workers Central (COB) and the Latin American and Caribbean Confederation of Household Workers (CONLACTRAHO). Holding of three tripartite round tables. Results: The employment contract; the wage booklet; the carrying out of the sociodemographic and economic study of the people working in households; and the carrying out of the assessment on freedom of association and collective bargaining. 28
Main measures identified at regional level for the formalizing of domestic work Promotion of unionization: Dominican Republic CIMTRA (Inter-union Committee of Working Women), as a coordination body between the trade union centrals CNUS, CASC and CNTD, has supported the creation of trade unions of domestic workers. At present there are three trade unions of domestic workers: ATH-CNUS (4400 members); SINTRADOME-CASC (3953 members); ASOMUCI (4000 members). CIMTRA is an ally in the presidential campaign to sign up 50,000 domestic workers into SENASA (National Health Service) through the subsidized scheme. 29
Awareness-raising and information campaigns Argentina: 2006: Campaign for sending of letters to taxpayers with income greater than a particular monthly amount who did not declare domestic work 2008: National awareness-raising campaign regarding registration and regularization, and tax benefits 2013: The Labour Court for Persons in Private Houses offers advice to workers and employers. Colombia: Labour Guide for Domestic Work, directed to people who work and people who employ (Ministry of Labour, 2012). Audiovisuals: membership by hours. Main measures identified at regional level for the formalizing of domestic work 30
Main measures identified at regional level for the formalizing of domestic work Awareness-raising and information campaigns Ecuador: Decent Domestic Work Campaign (2010). Objective: Disseminate information on the labour rights of domestic workers and increase social security coverage. Establishment of 260 mobile sites in the main cities of the country, where more than 50,000 workers and employers were served. The MRL estimates an increase of 25% in sign-up for the Ecuadorian Institute of Social Security. 31
BPS Main measures identified at regional level for the formalizing of domestic work Awareness-raising and information campaigns: Uruguay Communication strategies (explanatory pamphlets, television advertising, Web page, etc.) focused on the dissemination of information on the rights and obligations of members. Signing of agreement with the University of the Republic to establish a labour law clinic for domestic work employers, at the League of Housewives, Consumers and Users. Extended later to domestic workers, in coordination with the Single (Female) Domestic Workers Union. Delivery of culture vouchers to this sector of workers and their families Ministry of Labour and Social Security Inspectorate General of Labour and Tripartite Gender Commission carried out awareness-raising activities. Manual of Best Practices. Workers and Employers in Domestic Work (2013). Single Union of Domestic Workers In conjunction with the Provincial Boards of the PIT-CNT, carried out various activities in awarenessraising, dissemination of workers rights and organizing of trade unions - in various provinces (departamentos) of the country. 32
Some preliminary conclusions Equivalence of entitlements (minimum wage, workday, holidays, Christmas bonus ) Access to social security (specific measures) Formalization: holistic approach better results Promotion of unionization. Strengthening of inspection Additional measures: Simplification of procedures, discounts 33
Some preliminary conclusions Legislative reforms Access to social security Formalización Information and awareness-raising campaigns Unionization and Inspection Additional measures 34
Some preliminary conclusions Linkage to fulfilment of other entitlements: Minimum wage Establishment of specific measures (multi-employer, partial allowance, simplification of procedures, tax deductions) Access to mandatory social security Contributory or subsidized system. Benefits for those who are entitled (health, pensions); coverage VS. adequacy Allows greater oversight of fufilment of other entitlements 35
Main measures identified at regional level for the formalizing of domestic work Thank you very much! María José Chamorro ILO Gender Specialist chamorro@ilo.org Skype: mjchamorro 36