The problem of employment has become a central global concern in recent times. This makes the government and development partners to be fully engaged in finding a lasting solution to the problems. In the past, development planning efforts were concentrated on the development of modern industrial sector. Today, there is renewed interest in the informal economy worldwide. This is because a large share of the global workforce and economy is informal and because the informal sector is growing in many contexts and appearing in new places and guises. The informal sector serves as a buffer against unemployment in times of economic downturn, allowing an increasing share of the population to earn a livelihood from the sector rather than stay openly unemployed with no income. The sector has also played a key role in cushioning the adverse impact of economic crises. The paper therefore interrogated the nature of employment in the informal sector and is anchored on Modernisation theory. This paper is based on a desk and literature review of relevant articles and publications as well as on employment and the informal sector. The paper revealed that Nigerian Informal Sector is a major contributor to the Nigerian economy, accounting for a significant portion of employment and national Gross Domestic Product and also the informal sector currently accounts for over half of global employment and as much as 90% of employment in some of the developing countries like Nigeria. The paper therefore recommends that efforts should be made by the government and its agencies to create more jobs. Secondly, policies should be introduced to address identified challenges in the informal sector towards improving productivity and incomes of informal sector workers.