Unorganised sectors consist of all unincorporated private enterprises owned by individuals or households engaged in the sale or production of goods and services operated on a proprietary or partnership basis and with less than ten total workers. In rural areas, the unorganised sector comprises mainly of workers in small-scale industries, casual workers in construction, trade and transport, etc. and those who work in shops, street vendors, garment makers, rag pickers etc.

They have low wages, and there is no provision of overtime payment, paid holidays, etc. They work in very unsafe conditions and have no job security. They can be asked to quit at any time without any reason. More than 90% of the Indian workforce is employed in the unorganised sector which amplifies the need to provide protection on the issues of wages, safety and health.