Advancing Decent Work through Digital Wage Payments

Multi-stakeholder Forum on Science, Technology and Innovation for the Sustainable Development Goals 2021 Side Event

8.00 – 9.00 a.m. (Eastern Time)

Background
The Sixth annual UN Multi-stakeholder Forum on Science, Technology and Innovation for the Sustainable Development Goals (STI Forum) will take place from 4-5 May 2021 under the theme, “Science, technology and innovation for a sustainable and resilient COVID-19 recovery and effective pathways of inclusive action towards the Sustainable Development Goals”. The Forum provides an opportunity for facilitating interaction, matchmaking and the establishment of networks between relevant stakeholders and multi-stakeholder partnerships on thematic topics to identify and examine innovative solutions, gaps, capacity building and the dissemination of relevant technologies to achieve the SDGs.

Digital technologies have disrupted the financial system and have transformed the way workers and businesses alike conduct their financial transactions, quickly moving away from cash and embracing digital means to make or receive payments. The COVID-19 pandemic has accelerated these digital changes in the world of work, and the digitalization of wage payments has been receiving increased attention throughout the pandemic, as it is a way to minimize human interactions during financial transactions. Before, and even more during this crisis, several governments have been implementing policy and regulatory changes to encourage the transition to digital payments, including the payment of wages, and in the current context, the payment of temporary wage subsidies.

Yet, over 230 million male and female workers around the world still receive their wages in cash. Cash-based wage payments are inefficient for employers and they are risky and disempowering for workers, in particular vulnerable women workers. Evidence shows that the transition from cash to digital wage payments has the potential to increase the efficiency of payroll services, the respect of labour rights and the workers’ financial inclusion. However, workers and employers globally have unequal opportunities to use and access digital solutions and the transition to responsible digital wage payments often comes with challenges at the levels of enterprises, workers, regulators and the financial sector.

To respond to these challenges, the ILO has globally committed to promote responsible digital payments by joining the United Nations based Better Than Cash Alliance at the end of 2019. In addition, the ILO has just set-up the Global Centre on Digital Wages for Decent Work  to accelerate the transition, enhance sustainable enterprises, promote respect of workers’ rights and broaden financial inclusion. The Global Centre facilitates the development of inclusive digital wage systems through research, evidence-based advocacy and capacity building. It aims to enable millions of male and female workers around the world to receive their correct wages, paid digitally into bank accounts, payment cards or mobile money wallets, and make the most of them for better resilience and economic opportunities.

The transition to responsible digital wage payments can enable enterprises in various economic sectors to advance conditions of work and formalize employment, to have a better access to services and markets through improved compliance, to become more productive and to grow. If efficiently and responsibly deployed and supported through effective multi-stakeholder partnerships, the transition from cash to digital wage payments can be accelerated and scaled to create greater financial inclusion and gender equality, advance decent work and accelerate progress on the achievement of SDG 8.

Objective
The objective of the side event is to showcase the ongoing work around digital wage payments and the impact it is making to the promotion of decent work. Governments, employers and workers organisations and other stakeholders will discuss good practices and key challenges, as well as the types of partnerships needed for scaling-up efforts.