SolDevelo helped implement openIMIS in the Republic of Moldova. The purpose of this implementation is to support the Moldovan Government’s efforts of reducing the undeclared work problem, especially present in the agricultural sector. 

The Client

The Ministry of Labor and Social Protection of the Republic of Moldova is a government body responsible for formulating and implementing policies related to labor, employment, and social protection in Moldova. It plays a crucial role in ensuring the welfare and rights of workers, as well as providing support to vulnerable groups within the society. Through its initiatives, the ministry aims to foster inclusive growth, reduce poverty, and enhance social cohesion across the nation.

The International Labour Organization (ILO) is a specialized agency of the United Nations dedicated to promoting social justice and internationally recognized labor rights. It sets international labor standards, develops policies, and provides technical assistance to improve working conditions and employment opportunities globally.

openIMIS

openIMIS is an open-source software designed to manage and administer health insurance schemes, particularly in low and middle-income countries. Through its modular architecture and flexible design, openIMIS enables easy adaptation to different contexts, accommodating diverse healthcare delivery models, payment mechanisms, and benefit packages. This customizable nature empowers users to efficiently manage and scale health insurance programs while ensuring they align closely with the unique characteristics and priorities of the communities they serve.

Being a versatile MIS solution, openIMIS is capable of serving a variety of purposes related to information management, and can be used to deal with complex problems, one of which will be described below.

The Challenge

The challenge was to customize openIMIS for the client’s needs, and implement it in Moldova to support the government’s operations aimed at improving labor standards supervision and, in result, reduce the undeclared work problem in the agricultural sector. The main purpose of this project was to establish effective mechanisms providing Moldovan day laborers with social protection they are entitled to receive. openIMIS serves as a technical means of achieving this goal.

The undeclared work problem

Undeclared work, also known as informal or shadow employment, is a significant issue faced by Moldova, as it is in many countries around the world. Moldova, being one of the poorest countries in Europe with economic challenges and a high unemployment rate, is highly affected by the undeclared work problem that impacts its economy, society, and governance. 

Several factors contribute to the prevalence of undeclared work in Moldova, one of them being weak enforcement of labor regulations that further deepens the cultural acceptance of informal employment practices.

It results in serious consequences, harming both the citizens and the country as a whole:

Social impact

Undeclared work perpetuates social inequality and vulnerability. Workers engaged in informal employment often lack access to social protection, healthcare, and other benefits that formal workers enjoy. This can deepen poverty and widen the gap between the rich and the poor, leading to social instability.

Labor market distortion

The prevalence of undeclared work distorts the labor market in Moldova. It creates unfair competition for businesses operating in the formal sector, as informal businesses can evade taxes and undercut prices. This undermines the viability of legitimate enterprises and discourages investment, slowing down economic growth.

All of the issues mentioned above pose a serious risk for the Moldovan citizens, who notoriously fall victim to poorly regulated practices. To battle this problem, proper regulations and methods of carrying them into effect are necessary.

The Solution

The answer to the client’s challenges is a system that introduces simple, accessible and effective structure, designed to, on one hand, obligate employers to transparency in their hiring, and on the other hand, give labor inspectors tools to monitor the situation and detect any fraud attempts.

Verified employers are now obligated to purchase vouchers, here understood as tokens for work performed by agricultural workers, and assign them to day laborers for a specific time frame. The employers can assign only the vouchers that they have paid for. After the day of work is finished, the payment is transferred to the social insurance budget and the state budget on behalf of the day laborer that the voucher was assigned to. It is not possible for the employer to retrieve the funds, once they purchase a voucher, nor to retroactively revoke the voucher that has already been assigned.

That way, every verified employer must transparently register who they are hiring and when, and pay for their insurance accordingly.

To support this solution, we developed a system based on openIMIS that consists of three main elements:

Web application

The web application allows employers to manage their employees, acquire vouchers, and assign them.

After creating and assigning vouchers, the employer can move to payment via the government mPay app that is integrated with the system.

If needed, voucher prices can be modified by the application administrators. The voucher prices can be managed to match any changes of Moldavia’s minimum wage.

Mobile application

The mobile application can be easily accessed from portable devices, and used by labor inspectors to check whether inspected laborers have active vouchers assigned to them or not. 

By entering National ID, inspectors can access basic worker data, as well as their active voucher information, including employer data and assignment date. If no vouchers are active for the worker, relevant information will be displayed:

The application increases the level of control and allows to effectively detect fraud attempts committed by employers who decide to avoid paying for their workers’ social insurance. The system also streamlines the management of settling payments for the agricultural workers.

The Results

The MVP system has been successfully developed. The finished product is planned to go live this year. The newly developed solution is designed to meet the specific requirements of the client, and support the mission of improving day laborers social protection.

It was a great honor to work on this project and contribute to battling the undeclared work problem in Moldova. Being a customizable and versatile MIS solution, openIMIS can be used in many different contexts and answer to a variety of problems. We will keep on improving it to make sure it always provides an experience of the highest quality.