The ILO presented its Formalization Strategy for Latin America and the Caribbean (FORLAC 2.0), which will be implemented between 2024 and 2030. In the short term, FORLAC 2.0 seeks to contribute to improving policies and institutions that impact the transition to the formal economy, include the voice of business and trade union organizations that are not adequately represented in the design of policies, and improve the institutional environment to stimulate labor and business formalization. In the medium and long term, FORLAC 2.0 hopes to contribute to achieving progress in increasing productivity, productive transformation and diversification, greater coverage of social protection, the reduction of social and economic gaps in the territories – especially for rural areas – and the generation of greater opportunities for vulnerable groups and women; as well as contributing to the promotion of a fair transition in the context of climate and technological change. Labor informality affects one in two workers in the region. Despite the progress made in the transition to the formal economy at the beginning of the 21st century, informality remains a persistent challenge. The majority of informal employment is made up of workers in the informal sector, especially self-employed workers, which is related to low productivity and is reflected in working poverty and limited access to social protection. The region also faces great business heterogeneity, in size and level of productivity. Digital transformation, climate change and illicit activity present both challenges and opportunities. The approach that FORLAC 2.0 proposes is productivity with decent work as a central strategy to combat informality. In this sense, FORLAC 2.0 is based on six premises that guide the formulation and implementation of policies:

• Without a sustained increase in productivity there will be no sustained reduction in informality.
• Without compliance with labor rights there is no formal employment.
• Informality is not a monolithic and homogeneous block.
• There are no instant solutions or unique routes to formality.
• Formalization must contribute to a fair transition in the context of climate and technological change.
• Formalization requires inclusion, dialogue and execution.