Regulatory Watch · Employment Law

Labor Law & Employment Regulatory Watch

Monitoring Indonesia's employment law framework — Job Creation Law implementation, new employment regulations, minimum wage developments, and foreign worker requirements.

This tracker is updated periodically. For a current, tailored analysis of regulatory changes affecting your specific business — order a Regulatory Monitoring Brief.

Current Regulatory Status

Regulation / PolicySummaryStatusLast Updated
Job Creation Law — Employment ChapterOmnibus Law employment provisions govern severance, fixed-term contracts, outsourcing, and working hours. Constitutional Court revision implemented via GR 35/2021 and GR 36/2021.ActiveOngoing
Provincial Minimum Wage 2026Annual minimum wage adjustments effective January 2026. DKI Jakarta: IDR 5,396,761/month. Wide variation by province — check applicable province.ActiveJanuary 2026
RPTKA (Expatriate Staffing Plan)Tech-sector RPTKA processing simplified. 30-day processing target issued. Online submission via OSS required for all new expatriate work authorizations.ActiveFebruary 2026
BPJS Ketenagakerjaan EnforcementBPJSTK has increased audit activity for PT PMA compliance with social security enrollment. Penalties for non-compliance up to 0.1% of monthly wage bill per month.WatchQ2 2026
Fixed-Term Contract Limit EnforcementDSNAKER clarification on maximum fixed-term (PKWT) contract duration — 5 years cumulative including extensions. Enforcement being applied in labor court cases.ActiveApril 2026
Proposed: Severance ReformMinistry of Manpower consulted on severance formula adjustment for certain termination categories. No regulation gazetted — monitor H2 2026.ProposedMay 2026

What This Tracker Covers

This tracker monitors Indonesia's employment and labor law framework as it applies to foreign-owned companies (PT PMA) and their employees — both Indonesian nationals and expatriate workers. The primary instruments are the Job Creation Law's employment chapter (as implemented by Government Regulations 35 and 36 of 2021), provincial minimum wage decisions, BPJS Ketenagakerjaan social security requirements, and expatriate work authorization rules via the RPTKA and KITAS/KITAP system.

Minimum Wage Note

Indonesia has 38 provinces and over 500 districts, each with their own minimum wage applicable within their jurisdiction. The figures tracked here are provincial minimums — sector-specific minimum wages (UMK) in industrial areas and special economic zones may be higher. Always verify the applicable minimum wage for the specific location of your operations.

Foreign Employer Compliance Focus Areas

The compliance areas generating the most enforcement attention in 2026 are BPJS Ketenagakerjaan enrollment completeness (all employees must be enrolled within 30 days of joining), RPTKA compliance for expatriate roles, and fixed-term contract documentation. PT PMA companies that have been operating for several years without a systematic HR compliance review should treat this as a priority action item — DSNAKER audit exposure is real and penalties are indexed to payroll.

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