Informal economies in Tanzania are significant contributors to the country's GDP but face challenges related to labour law and workers' rights. The study employed a comparative analysis of existing legal frameworks, surveyed local businesses, and conducted interviews with stakeholders including government officials and labour activists. Approximately 60% of the workforce operates informally in Tanzania, highlighting significant disparities in access to benefits such as social security and health insurance. Current labour laws fail to adequately protect workers in the informal sector, particularly regarding employment contracts and working conditions. Introduce targeted legislative measures to formalize informal sectors, enhance worker welfare programmes, and strengthen enforcement mechanisms for existing laws.