The Global Employer Handbook is a comprehensive resource for labor and employment law in over 100 countries, including 170+ jurisdictions around the globe. Filter the employment law information by using the drop-down menus. Submit your search to discover the labor law information you requested.
Indonesia
Introduction
Indonesia is a country in Southeast Asia, between the Indian and Pacific oceans. It is the world's largest archipelagic country, with more than 17,000 islands, https://en.wikipedia.org/wiki/Indonesia - cite_note-islands-12 and at 1,904,569 square kilometers (735,358 square ...
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Hiring
A. Basics of Entering an Employment Relationship
- At Will vs. Just Cause
Under Law No. 13 of 2003 Regarding Labor (March 25, 2003), as last amended by Law No. 6 of 2023 (March 31, 2023) (the "Labor Law"), and other prevailing labor laws and regulations, employment-at-will and termination upon simple notice are now recognized in Indonesia. ...
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Compensation
A. Minimum Wage
The basic regulation regarding minimum wage is stipulated in GR 36. Minimum wages are categorized into:
- wages without allowances;
- basic wage and fixed allowances. The amount of the basic wage shall be at least 75% of the sum of basic wage and fixed allowances.
The aggregate wage must be greater than ...
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Time Off/Leaves of Absence
A. Paid Time Off
- Vacation Pay
Employees are entitled to a minimum of 12 working days of paid leave after being employed for 12 consecutive months.
- Sick Leave Pay
Full wages must be paid for the first four months of sick leave, 75% of the full wage for the second four months, 50% for the third four months, and 25% of ...
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Discrimination and Harassment
A. Discrimination
- Protected Classes
The Labor Law contains provisions which regulate the special protection of women, children, and disabled workers as follows:
1. Women
Women's work at night is regulated in Article 76 of the Labor Law, as follows:
a) ...
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Termination/Dismissal Issues
A. Overview
The Labor Law states that the employer shall do his or her best to prevent termination of employment. In order to dismiss an employee, the employer must first inform the employee of the purpose of and reason for the termination. If the employee rejects the termination, bipartite negotiation with the employee and, if applicable, ...
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Layoffs/Work Force Reductions/Redundancies/Collective Dismissals
A. Overview
The two approaches suggested for workforce reduction are:
- Negotiate individual settlements, employee by employee, and obtain written agreements from the affected employees; and
- Agree to a formula settlement with all employees or their representatives and obtain their written agreements.
- ...
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Unfair Competition/Covenants Not to Compete
A. Trade Secrets
With the passage of Law No. 30 of 2000 Regarding Trade Secrets (December 20, 2000), employers enjoy protection of their trade secrets regarding: (a) methods of production; (b) methods of processing; (c) methods of sale; and (d) other information in the area of technology and/or business that has economic value and ...
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Personnel Administration
A. Payroll Requirements
"Wages" are defined as the rights of employee received and expressed in the form of money as a reward from the employer to the employee, including allowances for the employee and his family for a job and/or service that has been or will be performed.
Wages consist of the following components:
...
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Privacy
Aside from the broad constitutional right to privacy, personal data protection is governed under Law No. 27 of 2022 Regarding Personal Data Protection (the "PDP Law"), as well as under various industry-specific legislation concerning data privacy.
The PDP Law is the first comprehensive law in Indonesia to govern personal data protection ...
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Employee Injuries and Workers Compensation
All employees in Indonesia, including expatriates who work in Indonesia for a minimum of six months, must participate in and be registered with the BPJS of Employment. All of the relevant government regulations, except for the relevant government regulation on pension security, clearly provide that expatriates that work in Indonesia for a minimum of six ...
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Unemployment Compensation
The Pre-Employment Card program is a work competency development program aimed at job seekers, workers/laborers affected by termination of employment, and/or workers/laborers who must improve their professional skills. The Pre-Employment Card program provides two types of incentive: (i) incentive for finding a job, amounting to IDR600,000 per month ...
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Health and Safety
A. Overview
The regulatory framework for employee health and safety is based on Law No. 1 of 1970 Regarding Work Safety (the "Work Safety Law") and the Labor Law, which set out the basic principles for ensuring safety at work. MOM Regulation No. 5 of 2018 Regarding Health and Safety regulates the Threshold Value of Physical ...
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Trade Unions – Industrial Relations
The basic legislation governing labor unions in Indonesia is Law No. 21 of 2000 Regarding Labor Unions (the "Labor Union Law"), which was implemented by several MOM decrees and regulations. The Labor Union Law has significantly changed Indonesian law with respect to labor union issues. Prior to its enactment, Indonesia ratified ILO Convention ...
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Immigration/Labor Migration
A. Overview of Business Immigration Policy
A local employer in Indonesia who wants to employ a foreign national must arrange a Work Permit for the foreign national, including a Foreign Worker Utilization Plan (Rencana Penggunaan Tenaga Kerja Asing or "RPTKA"). The expression "Work Permit" in this context involves ...
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Originally published by Global Employer Handbook.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
