The term informal work is used to classify work practices that take place outside labor legislation. It is defined as a deviation from the “Western” norm of an ideologized formal “standard” employment relationship. We elaborate on the processes of informal work’s categorization, looking at the theoretical debates on modernization and development that have given rise to this dualistic view of economic activities. It is necessary to contextualize the categorial production of informality in this dichotomous way of thinking – both historically and spatially. Reference is made to an important actor in this categorization process: the International Labour Organisation which globally instituted the category of the informal sector. The categorization process of informal work was bound up with its early conceptualizations in the context of development policies, empirical research and employment programs directed at the so-called Third World. We discuss the category’s boundaries and shortcomings by pointing to the non-coverage of many labor practices that could be described as entanglements between formal and informal arrangements rather than clearly belonging to one or the other. We also show that informality is shaped not only by legal regulations and social and economic practices but also by statistical definition and categorization which are connected with normative and legal concepts of labor.